Key Differences between Theft and Burglary Insurance
Hetvi Vashi
Author
Burglary and theft insurance provides security to businesses for any losses or damages caused due to the stealing of items within property premises. This is an integral policy when considering insurance for business and enhancing the overall security of the property against any attack or theft. Typically, theft and burglary might provide coverage for stolen items, but there is a significant difference between theft and burglary.
What is Theft Insurance?
Theft insurance is a type of insurance policy that offers compensation for the losses occurring to a company through an unforeseen act of stealing items without the presence of any occupant within the premises. This includes pickpocketing, shoplifting, or stealing valuable items such as cash, electronic gadgets, company products or other stock items, and other items such as jewellery. Typically, theft insurance supports the insured in streamlining recovery of valuable items lost. Some insurers also provide coverage for theft extending beyond the company’s property premises.
What is Burglary Insurance?
Burglary insurance specifically protects against any illegal, unlawful, or forceful entry into the property premises with the intent of committing a crime. In burglary insurance, during the claims settlement process, the insured is required to submit evidence that proves the forced entry, such as damaged windows, doors with broken locks, etc. Burglary insurance provides compensation for stolen items but also offers coverage to recover the damages caused to the property due to forced entry.
Key Differences Between Theft and Burglary Insurance
| Sr. No | Point of Difference | Theft Insurance | Burglary Insurance |
|---|---|---|---|
| 1 | Definition | Covers losses for stolen items without any forced entry. This also includes situations of pickpocketing, shoplifting, etc. | Covers losses from stolen items and property damage caused due to forced entry. |
| 2 | Scope of Coverage | Theft insurance is applicable to the company’s premises and other locations as per the policy. | Burglary insurance provides cover for theft and property damage specific only to the location of the insured company. |
| 3 | Coverage for Property Damage | Theft insurance does not cover any damages caused to the property when the company’s items are stolen. | Burglary insurance offers complete coverage for any damage caused by forced entry which includes broken locks of doors, damaged doors, and windows. |
| 4 | Coverage for Stolen Items | Theft insurance covers stolen items irrespective of the location where items are stolen. | Burglary insurance covers theft only in case of forceful entry within the company premises and not in any other location beyond the insured property. |
| 5 | Proof Required | During the process of claims settlement for theft insurance, no proof is required that iterates forced entry within the company premises. | During the process of claims settlement for burglary insurance, evidence and records are required that prove forced entry and criminal acts such as broken locks, damaged doors or windows, etc. |
| 6 | Cost of Premium | The cost of premium for theft insurance is lesser as compared to burglary insurance but varies according to factors such as type and size of business, location, value worth of goods, and the required coverage amount. | The cost of premium for burglary insurance is higher as compared to theft insurance. The factors influencing premium price are the size of the business, location of the property, risk factors for vandalism, value of goods, and desired coverage. |
Importance of Understanding Theft and Burglary Insurance Differences
Theft and Burglary Insurance have quite significant differences when it comes to the coverage and claims settlement process. It is important to understand the difference between theft and burglary insurance as this helps to understand the coverage requirements aligning with the unique business requirements. Both theft and burglary insurance have different objectives and provide distinct levels of protection. When business owners understand the difference between theft and burglary insurance, they can make conscious decisions aligned with the personalized requirements of the business specific to the risks, finances, and operations. The coverage for theft and burglary insurance varies significantly and so does the premium amount.
Choosing the Right Insurance Policy
When selecting an insurance policy, it is important to consider the following factors:
- Cost-benefit analysis for premium vs coverage: It is important to analyze the cost of the premium vs the coverage benefits. The coverage limit should meet the requirements and the risk probability of the business for occurrence of theft, or burglary.
- Risks Assessment: Evaluate the risk potential for any occurrence of theft or burglary based on the particular location, prior history of thefts, vandalism, and other such criminal activities, and the nature and type of business.
- Coverage Requirements: With thorough risk analysis, it is important to understand the unique requirements of business which define the extent of coverage required and the limits. For example, a smartphone manufacturing unit is highly prone to theft, so its coverage limit will vary as compared to a textile manufacturing unit. This should also include if there is any chance of vandalism.
- Claims Settlement Ratio (CSR): Reviewing the insurer’s reputation is important which can be done by reviewing the claims settlement ratio and checking the reviews of the previous customers. A higher CSR implies the high credibility of the insurer in settling the claims along with streamlined risk management to ensure consumer confidence.
Conclusion
Although burglary and theft may appear to be similar terms with a common understanding around stealing items, there is a significant difference between both the terms and their insurance coverage. Typically, theft is stealing items from the company premises or any other location and illegal possession of items. Burglary is about forced entry into the company’s premises by breaking the locks of doors or windows, damaging the property in the absence of any occupants followed by stealing valuable items. Burglary and Theft insurance is a comprehensive policy that offers protection to businesses against any expected attack and theft and helps compensate for the damage caused to the property and compensate for the loss of items.
Frequently Asked Questions
Explore moreWhat does theft insurance coverage include?
Theft insurance provides coverage for items stolen from the insured company premises which includes stock, cash, electronic gadgets, and other valuable assets of the owners. The coverage helps compensate for the value of stolen goods. However, theft insurance does not cover any act of vandalism or forceful entry.
Is burglary insurance required if I have bought theft insurance?
Theft insurance helps recover the value of insured goods when stolen, but does not provide coverage for any damage caused to the property in any event of forced entry and criminal acts along with robbery. As burglary insurance covers any forceful or unlawful entry within the company premises, it is mandatory to have burglary insurance even if the insured already has theft insurance for the company.
How are robbery and burglary different?
Robbery is an act of stealing items committed in the presence of occupants by attacking them or threatening them. On the other hand, burglary is also forceful entry of attackers to break-in the company premises without the presence of any occupants in the property.
What is the key point of difference between robbery and theft?
Theft is an act of stealing the personal assets of the company or an individual in the absence of people. On the contrary, robbery is an extremely violent act of stealing goods by breaking through the property, threatening people with attacks, and causing vandalism.
Do you have more questions?
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