Your primary commercial property policy may include some coverage for burglary losses, but it is typically quite narrow in scope. Commercial property insurance often excludes certain types of crime-related losses or restricts how much you can recoup for property damaged during a break-in. Because of these limitations, you may benefit from specialized coverage designed specifically for burglaries.

Defining burglary

To understand why burglary insurance differs from other business crime policies, let’s start with some definitions. In the insurance industry:

• “Vandalism” is the intentional destruction of a business’s physical property, building or grounds. These losses are usually covered by standard commercial property policies.
• “Theft” is knowingly taking property from a business without the owner’s approval or knowledge, or by way of false pretenses, such as fraud or forgery. A criminal does not have to break into the building to commit theft. Depending on the type of theft involved, you’d need an aligned policy, such as employee dishonesty, forgery or alteration, computer fraud, or theft of money and securities. Your insurance professional can explain the nuances of each.
• “Burglary” is defined as unlawful, forced entry into a building that is done with criminal intent. Burglary usually, but not always, involves theft. In other words, something doesn’t have to be stolen for the event to qualify as a burglary. However, there are some requirements you must meet to make a burglary insurance claim. These include submitting a police report and proof of forced entry, such as broken glass, marks on a door, a filed lock or another sign of physical compromise.
• “Robbery” is sometimes considered interchangeable with burglary. However, the two terms are not the same. While burglary involves forced entry into a building, robbery requires the use of force, threat of force or intimidation against a person or group of people. It’s a subtle difference, but make sure you confirm how these two terms are being used in any policies you consider.
• Shoplifting is not burglary and is often not covered by insurance.

When a claim is reviewed, keep in mind that losses may be assigned to different crime policies. You’ll need the right protection in place to receive reimbursement. For example:

• The cost to repair a damaged entry door that was locked may be covered by your burglary policy, while the cost of cleaning up spray-painted surfaces may fall under your commercial property policy, even though both losses occurred during the same event.
• If something is stolen from your business but there is no sign of forced entry, one of the theft-related policies might apply, but burglary insurance would not.

To eliminate these gray areas, some insurance companies package various crime policies to make sure your coverage applies whether you’re a victim of burglary, robbery or theft. There are many benefits to a combined policy like this.

Proof of ownership

In addition to providing proof of forced entry and submitting a police report to qualify your claim under burglary insurance, you’ll need to prove ownership of any property stolen during the burglary. Depending on the item’s value, this can usually be accomplished by supplying:

• A receipt or vendor invoice
• A credit card statement or bill
• Accessories, packaging or manuals for the item in question
• Photos taken at your place of business
• A notarized oath stating your ownership
• A reasonable inventory list of inexpensive items that would be expected for your type of business

You may be able to use a combination of the above proof points, and you should expect more stringent proof of ownership to be required when you claim a loss of a high-value item. To help set recordkeeping standards, be sure to review proof of ownership guidelines when you first get your burglary policy.

Policy design

Before finalizing your policy, review the limits of each property category included in your coverage. Some high-end items, such as collectibles, custom-made pieces or jewelry, should be individually itemized on the policy with a dollar value listed.

In addition, if your business uses an on-site safe, this may require a separate type of burglary insurance or an endorsement to your primary policy. You’ll also need to select whether you prefer to be reimbursed for lost property based on current market value (what it’s currently worth, including depreciation) or replacement cost (how much it would cost to replace the same item with something of equal value).

With the complexity of defining and insuring crimes against businesses, it’s best to discuss all your concerns with an insurance agent or broker who specializes in commercial insurance. You may need one or two separate coverages or a blended policy that addresses multiple types of crimes in one broader product.