Some insurance policies have coverage for money or securities that lost as a result of theft, disappearance, or destruction.

One of the times in my life I felt quite vulnerable was after a major holiday block-buster sale when I was in charge of closing a high-end retail boutique. One of my duties was to take the cash (and this was a time before debit cards were popular so many of our sales were in cash) to the bank after the store closed. The rule was the bank deposit had to be done after the store closed at 10pm during the holiday season and sometimes the cash exceeded $20,000.00. But I was not the only nineteen-year-old making the nightly deposit at the bank across the parking lot; almost every other manager from the mall would do the same thing around the same time, in the same dark parking lot. And many of us were working nights and weekends as college students to pay tuition.

Under the shopping center rule, employees could not park near the entrances, so we would walk out of the building and to the back of the parking lot with big plastic envelopes that were obviously filled with cash and checks. My employer had a policy that two people had to be involved in the deposit, but every night we would walk to our respective cars and then drive over to the bank and make the deposit. Looking back, there was room for a lot of disaster with these bank runs.

This routine happened seven days a week for some twenty to thirty stores and anyone watching would have recognized this was an ideal time to commit crimes and steal cash. I still can’t believe any company would put its employees in that danger, and that I followed the procedure without implementing a complete change. Now, 15 years later, I am told deposits are made the following day during daily light hours.

Since money is a part of any business, there will always be risk and there will always be loss. You can protect your losses by making sure your commercial policies have insurance for money and securities. You can also insure your business for loss of the funds that are off premises and in transit.

Check your policy to look at how the insurance company has determined that money and securities will be valued. Many insurance gurus spend a lot of time debating on securities valuations because those values are subject to change. Money can also fluctuate with the international market, and it is worthwhile to discuss claims with a professional who has your best interest at the forefront and is not a representative paid by the insurance company.

Here are a few topics to consider.

1. You want to make sure you are being paid in full for your loss and there can be discussion and disagreement for money and securities.

2. Many times the carrier will state that it will pay no more than the face value, but for foreign currency there may be a provision that says at the insurance company/insurer has the option to determining valuation. Two options that might apply are:
a. whether you will be paid the face value of the money issued by the country in question, or
b. The US dollar equivalent that is determined by the exchange rate on the date the loss was discovered.

3. For securities, often times the insurance company will pay the value of the securities at the close of business on the day the loss was discovered.

4. Insurance companies may also have the option of settling the securities claim by paying the value of the securities (again much to debate here) or by replacing them in kind.

One Florida case1 interpreted a policy that provided coverage for the cash profits of a business stolen after they left the business but before they were deposited in the bank. Before issuing the insurance, the insurance company was fully aware of how the money was handled after close of business.

The procedure represented to the agency was that each night at the close of business all money on hand in each business was accumulated by the company’s president, and taken to his home where he maintained an office. The company funds were kept in the president’s personal possession until the following business day when bank deposit slips were made out and the money taken to the bank for deposit. The insureds allege that the agency knew of this procedure and bound coverage specifically for any loss that may happen to the money before it was deposited in the bank.

The policy provided the following coverage:

Robbery Outside the Premises. To pay for loss of money, securities and other property by robbery or attempt thereat outside the premises while being conveyed by a messenger.

“Messenger’ means the insured, a partner therein or an officer thereof, or any employee thereof who is in the regular service of and duly authorized by the insured to have the care and custody of the insured property outside the premises.

As one might imagine, the president’s home was broken into and the funds from Saturday and Sunday were stolen. The insurance company did not pay the claim. The court agreed that under the policy, the cash would not be covered because the funds were not being conveyed by a messenger at the time of the loss.

The court explained its reasoning and determined that the policy was not ambiguous and:

[from the facts] “sub judice, it is clearly apparent that the mission of appellants’ president to convey the company’s funds from the places of business to the bank was interrupted and came to a stop when he took the money to his home at the close of business on Saturday where he intended to keep it until he could deposit it in the bank on the following Monday morning. At the time of the robbery the money had rested in the home of appellants’ president for a period of some six hours. Had the robbery not occurred, it would have been at least another twenty-four hours before the mission would have been resumed and the money ‘conveyed’ to the bank for deposit. From these facts it is irrefutable that at the time of the robbery the money was not in the process of ‘being conveyed by a messenger’ as required by the terms and provisions of the policy.”

1 State Liquor Stores No. 1 v. U. S. Fire Ins. Co., 243 So. 2d 228 (Fla. 1st DCA 1971).