Are gradually operating losses covered? (e.g. stock shrinkage, shoplifting)

  • It is important to draw a distinction between the general shrinkage of stock and an employee’s theft of stock over long period. Although the latter is covered, it is not the intention to cover the former for several reasons including:
    • This is a trade risk
    • Mostly it would not be possible to show what portion of the stock was missing due to the dishonesty of employees (as opposed to non-employees).
    • In fact, in some cases it might be difficult to show what portion of the loss was even due to dishonesty. The drop in weight of a consignment of fruit could, for example, be partly due to storage temperature.
  • For these reasons specific stock shrinkage/pilferage exclusions are common on Commercial Crime policies.
Commercial Crime