Louisiana Crime Insurance

What is Louisiana Crime Insurance?

Commercial crime insurance reimburses your business for direct financial loss caused by criminal acts. It sits apart from property coverage, which generally excludes theft of money and losses caused by your own employees. It also sits apart from cyber insurance, although the two overlap in places.

Most crime policies are built from separate insuring agreements, and each one carries its own limit. Common ones include:

• Employee theft
• Forgery or alteration
• Inside the premises theft of money and securities
• Outside the premises (money in transit)
• Computer fraud
• Funds transfer fraud
• Money orders and counterfeit currency

You choose which agreements to buy and how much limit to put on each. That flexibility helps, but it also creates gaps when owners select a package without reading which agreements are actually checked on the declarations page.

Employee Theft and Forgery Coverage in Louisiana

Employee theft is the core of most crime policies, and for good reason. The people with the easiest access to your bank accounts, inventory, and payroll system are the ones you already trust. Typical claims involve padded payroll, fake vendor invoices, skimmed cash deposits, and personal purchases on company cards.

Forgery coverage responds when someone forges or alters a check, draft, or promissory note drawn on your account. These schemes often run alongside other fraud. In 2026, the Louisiana Department of Insurance referred a case in Ouachita Parish that led to charges including five counts of forgery and five counts of computer fraud in a years-long scheme. The "years-long" part matters. Employee schemes frequently run for a long stretch before anyone notices.

That's why discovery versus loss-sustained policy forms deserve attention. A discovery form may cover losses found during the policy period even if the theft started years earlier, while a loss-sustained form typically limits coverage to losses occurring while that policy was active. Ask which one you have.

Computer Fraud and Funds Transfer Fraud

Social Engineering Sublimits and Risk Mitigation

Social engineering coverage, sometimes called fraudulent impersonation, may reimburse losses when an employee is manipulated into transferring funds to a criminal. It's the coverage built for business email compromise, and the threat is large. The FBI found that BEC totaled $3.046 billion in reported losses in 2025, the second-highest loss category for businesses. The same report added a first-ever section on AI-related crime, which accounted for $893 million in losses in 2025. Cloned voices and convincing fake emails are making these scams harder to spot.

Carriers typically offer social engineering as a sublimit, meaning a smaller cap inside your overall crime limit. A business might carry $500,000 for employee theft but only a fraction of that for social engineering. Many policies also require a verification step, such as a callback to a known phone number before changing payment instructions. Skip that step and coverage may not apply.

Practical controls that help on both the claim and the application:

1. Call vendors back at a number already on file before changing bank details.
2. Require two people to approve wires above a set dollar amount.
3. Train staff to treat urgent payment requests from executives with suspicion.

How Crime Coverage Differs From a Fidelity Bond

People use "fidelity bond" and "crime insurance" interchangeably, and that confusion causes real problems. A fidelity bond typically focuses on employee dishonesty, often to meet a specific contract requirement or an ERISA obligation that requires the people handling retirement plan funds to be bonded. Its purpose is narrow: protect against theft by the people trusted with money.

Crime insurance is a broader package. It protects your business assets against internal threats like employee theft and external threats like forgery, computer hacking, and impersonation scams. A business can satisfy its ERISA bond and still have zero protection if an outsider spoofs a vendor email.

Surety bonds are a different animal again. Louisiana's bond requirement for non-attorney notaries rose fivefold, from $10,000 to $50,000 as of February 1, 2026. That bond protects the public from the notary's mistakes or misconduct. It doesn't protect the notary's employer from theft.

Common Coverage Differences at a Glance

Even among crime policies, the fine print varies widely from carrier to carrier. These are the differences that tend to decide whether a claim gets paid:

• Discovery vs. loss-sustained form: affects whether older, recently uncovered thefts qualify.
• Social engineering sublimit size: some carriers may offer meaningful limits, others token amounts.
• Verification requirements: callback conditions can turn a covered loss into a denied one.
• Definition of "employee": may or may not include leased workers, volunteers, or independent contractors.
• Client property coverage: some forms may extend to theft of a client's money by your staff, which matters for bookkeepers, property managers, and IT firms.
• Deductibles: these often vary by insuring agreement.
• Prior theft exclusion: coverage for an employee typically ends once you learn of any dishonest act by that person.

That last point trips people up. If you catch an employee stealing and decide to give them a second chance, your policy may no longer cover anything they take afterward.

Frequently Asked Questions About Crime Insurance

Does my general liability policy cover employee theft? No. General liability covers injury and property damage you cause to others, not money stolen from your business.

Will cyber insurance pay for a fraudulent wire transfer? It might, depending on the policy, but many cyber forms limit or exclude social engineering. Compare your cyber and crime coverage side by side so you don't have a gap or pay twice.

Do I need a fidelity bond if I already have crime insurance? Possibly. If a contract or ERISA rule specifically requires a bond, a crime policy may satisfy it only if written to meet those terms.

How much social engineering coverage should a small business carry? Base it on the largest single payment you routinely send. If you wire $80,000 to suppliers, a $25,000 sublimit leaves you mostly exposed.

What should I do if I discover theft at my business? Notify your carrier promptly, preserve records, and contact law enforcement. Late notice is a common reason crime claims get denied.

Is insurance fraud treated seriously in Louisiana? Yes. Louisiana law sets felony penalties of up to 5 years of imprisonment plus mandatory restitution, and anyone suspecting insurance fraud must report it to the Department of Insurance within 60 days.

Before You Buy a Policy

Louisiana is tightening its approach to fraud. Directive 228, effective April 1, 2026, requires authorized insurers to electronically file annual anti-fraud plans, and HB 739 expanded the investigative reach of the Office of Insurance Fraud. State regulators describe Louisiana as an early adopter of AI-driven fraud detection. That's encouraging, but enforcement doesn't refund your stolen money. Your policy does.

Before you sign, pull your current declarations page and check which insuring agreements you actually have. Confirm the social engineering sublimit against your real payment sizes, and ask whether any callback conditions apply. If a contract demands a fidelity bond, make sure the wording matches.

Crime coverage rewards people who read the details, and that's where an independent agency earns its keep. Kyle Beerbohm and the team at Aubert Insurance Agency in Covington and Slidell have been helping Louisiana families and businesses since 1910. They compare options from multiple carriers and explain the exclusions in plain language before you commit. Start a Quote online, let them shop the market for you, and pick the plan that fits how your business actually moves money.