What is loss prevention insurance?

Insurance for loss prevention protects the insured from an unexpected and uncontrollable loss of the value of the covered assets from the occurrence of the specified events. Although any type of victim's insurance is technically designed to compensate the insured against loss, the term “prevention of losses” has a business context, which concerns the risk of loss of theft. This type of coverage is usually purchased as part of the company's comprehensive business insurance and is considered to be business costs. There is a certain percentage of inventory that does not appear as cash in books when sales transactions are eventually aligned with the remaining stocks. This missing inventory or missing cash is a loss for a company commonly known as shrinking. The retail industry has a standard percentage of shrinkage, which is considered to be expected part of business, while anything about this standard percentage is considered an unusual loss.

Shrikage may be the result of any number of things such as the supplier or an administrative error in stock monitoring. The largest part of the percentage of loss is often formed by theft of a combination of internal and external sources. Employees develop schemes to stole goods and money, and Shoplift customers and also commit control and credit card fraud. Business purchases insurance prevention insurance within its comprehensive coverage to compensate against unusual cases of theft that falls beyond the standard normal level of loss in the field.

For example, if the employer found that employees have managed to steal tens of thousands of dollars over time despite the control of a company that is prevented from such an activity to the company up to the amount of politics. This is an important protection for business because stolen employees are often spent and never fully recovered. Theft of employees over a certain amount of money is considered a catastrophic incident that is possible but nECEMPED, like the theft of a car, but is never expected, so risk insurance is a good business practice.

Corporations and banks also buy loss prevention insurance. In this context, insurance usually protects against the main cases of embezzlement and the departure of assets, especially according to higher management. Banking policy also often protects it from robbery and fraud by third parties and employees.