REAL ESTATE CRIME RISK: PROTECTIVE PREVENTION MEASURES & INSURANCE COVERAGE

Crimes occurring throughout the retail and residential real estate industries are a serious and growing threat to owners. Owners often underestimate the risk of crime, leading to preventable incidents and higher premiums.

Frank DeLucia

Senior Vice President

Hub International Northeast frank.delucia@ hubinternational.com

(212)338-2395

An increase in civil disorder and mass-theft incidents has made insurance companies hesitant to insure certain properties. Surveillance videos often show large groups of criminals going on “smash-and-grab” retail thefts. Law enforcement has had difficulty preventing and prosecuting these crimes. And property owners and operators that lack proper insurance are paying the cost of the crime as well as defending themselves against any litigation.

Real estate crime insurance covers a range of crimes, both on the part of employees and third parties or outside perpetrators. This includes theft, forgery and other acts of fraud.

However, before underwriting against losses due to crime, insurers will thoroughly investigate the safety and security of a given property. A high level of security increases the chance of a lower quote at renewal. Here are five things owners and operators can do: and commercial offices can install barriers to entry such as electronic key cards. For retail, security cameras and alarms can discourage criminals, while silent alarms can protect employees. Additionally, video surveillance and analytics software will, at the least, provide a record of stolen items in submitting a claim.

Conduct a property risk assessment. An owner may think because their building is in a safe area that it isn’t vulnerable to crime. However, many different elements factor into being a crime risk. A property risk assessment will identify the security aspects that need improvement to improve crime prevention.

Train employees and add staff. Employee and customer safety is the most important element in security. Staff at retail or commercial properties should be trained to ensure safety in case of a crime. In addition, hiring extra security services and guards can also reduce crime, which is particularly important in areas where law enforcement can’t respond quickly.

Improve the property. Expanding security systems and adding high-intensity LED lights in public areas can dissuade criminals. Maintenance is also important. A building owner can have a crime claim denied if locks, alarms, generators and backup systems aren’t working properly. It also helps to position customer checkouts near the exit, properly position mirrors and security cameras and post signage that outlines the consequences of theft.

Consider Real Estate Crime Insurance.

Implement technology. Residential high-rises

Many property owners believe that General Liability (GL) insurance will cover all losses stemming from crime, but GL insurance only covers third-party bodily injury and property damage. Real estate Crime Insurance (CI) specifically covers losses related to crime. Property owners should determine a maximum allowable crime loss and ensure their CI coverage is equivalent to that amount.