A commercial theft claim is decided by what you can prove was there

A break-in at a business produces two losses that are handled in very different ways. The first is the damage done getting in and out — a pried storefront, a cut roll-up door, a smashed display case, an alarm panel torn off the wall. That part can be photographed, measured and priced by any contractor. The second is what left with the thieves: stock, tools, equipment, computers, copper, a delivery van’s worth of pallets. That part cannot be photographed at all, because it is no longer there. It has to be rebuilt from purchase invoices, point-of-sale data, the last physical count, serial-number lists and bank records — and on a commercial claim the carrier expects that reconstruction to be precise, because stock and equipment are usually the larger number on the file.

The commercial property form also reads differently from the homeowners policy most owners know. On the widely used ISO forms, theft is only a covered cause of loss on the Special causes-of-loss form; a building written on the Basic or Broad form generally covers the damage burglars do breaking in or out under vandalism, but not the property they carry away. Even on the Special form, theft comes with its own exclusions. Loss by a dishonest or criminal act of the insured, a partner, an officer or an employee is excluded, which is why the first question on many commercial theft files is who had keys and alarm codes. Property that is simply missing, where the only evidence is a shortage found when inventory is counted and there is no physical sign of what happened to it, is excluded as well. And money and securities are generally not covered property on the building-and-contents form at all — cash taken from a safe or a register usually belongs to a separate commercial crime policy, if one was bought.

Two more conditions decide a large share of commercial theft claims. The first is vacancy. On the standard form, if the building has been vacant for more than 60 consecutive days before the loss, theft, attempted theft and vandalism are not paid, and most other covered losses are reduced. "Vacant" has its own definition — for a tenant it turns on whether the space still holds enough business property to carry on customary operations; for an owner leasing space it turns on how much of the rentable floor area is rented or in use — and a building between tenants, mid-renovation or closed for the season can fall on either side of the line. The second is the theft limitation: many forms carry a per-occurrence cap on theft of categories such as jewelry and watches, precious metals, furs, and patterns, dies and molds, which matters a great deal to a jeweler, a machine shop or a manufacturer and is easy to miss until the claim is presented.

The work on this claim is therefore mostly an accounting job carried out quickly. The police report is filed and its number goes on every document, as the policy conditions require. The forced-entry damage is photographed before the board-up crew arrives, because that damage is also the physical evidence that separates a burglary from an inventory shortage. The stolen-property schedule is built line by line from your own records — the last count, receiving logs, invoices, serial numbers, the sales that left stock on the shelf after that count — and valued on the basis your declarations actually provide, which for stock and equipment is not always replacement cost. Where the theft shut the business down or slowed it, the business income side is opened at the same time rather than after. For the homeowner version of this loss, see our vandalism and theft claims page and the guide to special limits and proof of ownership.