How Retail Theft Insurance Can Protect Your Business

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We’ve all read the headlines about shoppers swarming stores during Black Friday, stealing large numbers of  electronics. But that’s not where it ends. The National Retail Federation's 2022 Retail Security Survey shows that theft, gift card fraud and inventory mismanagement as well as employee dishonesty accounted for nearly $95 billion worth of losses last year. That’s about $5 billion more than 2021. Giants like Target and Walgreens closed some locations or shortened store hours because of thefts, but small businesses have been hit the hardest.

Theft accounts for 40% of retail shrink, and experts call these large thefts organized retail crime (ORC). ORC is a significant and growing area of concern for retailers of all sizes. In fact, of the businesses surveyed by the National Retail Federation, 52.9% reported that theft had increased in their shops. Zero businesses said it had declined since 2021 when ORC began making headlines. However, nearly 30% of thefts are committed by dishonest employees.

This article provides important insights and tips on retail theft. Also, you'll see why your business needs the right insurance coverage to meet today’s cases of retail theft.

Why Is There an Upstick in Stealing?

Criminals are hitting stores, sometimes multiple times, to sell their wares on the black market. There is an uptick in crime all around the country, which inflation has caused to rise even more.

Business reported $95 billion worth of losses last year, $5 billion more than 2021.

According to the National Retail Federation (NRF), ORC costs retailers an average of $720,000 for every $1 billion in sales as of 2020, up from $450,000 five years earlier.

Here’s more:

  • Nearly $69 billion worth of products were stolen from retailers in 2019 (pre-COVID) and the number has increased each year since.
  • Nearly 67 % of asset protection managers at leading retailers surveyed report a moderate to considerable increase in organized retail crime (ORC), and 80 % believe it will only get worse in the future.
  • Academic research has suggested that most retail theft represent crimes of opportunity. Causes include poor economic conditions, and dissatisfaction among workers. Anonymous online marketplaces are used to sell stolen goods, contributing to the growth in ORC.
  • The growth in online marketplaces (61%) is highly correlated to the number of shoplifting events reported each year. In addition, categories of products most subject to shoplifting activities are also the ones most sought after through online marketplaces.
  • Only 20 to 25 % of known offenses are reported to police. Store-level personnel are just overtasked and do not have time to report crimes, which go undeterred.

Below is a chart specifying where most thefts are being done:

Type of Retail Theft

Increase Over the Past Year 

Instore fraud

Up 69%


Up 61%


Up 54%

Cargo en route to business

Up 47%

Distribution centers

Up 32%

Third-Party Centers

Up 32%

Do Retail Stores Have Insurance for Theft?

Commercial property insurance will protect your shop and contents against losses due to fire, storm damage, theft, vandalism, or damage from vehicles and more. Typically, you will be covered for covered events that damage your building, signage, furniture, equipment, inventory, and anything else you keep on the business premises.

Liability insurance, or general liability insurance, will cover your business against accidents that affect customers or other visitors to the store, including slips and even injuries related to retail crime, for which you are legally responsible. Liability insurance won't cover employee injuries. For that you’re required to have workers compensation depending on how many employees you have and the state your business is in.

Business interruption insurance: If your business is closed for a period of time after a covered loss, this coverage will pay for lost revenues while you’re shut down. This might happen, for example, if vandals damage locked cases and you have to fix them before opening the doors.

Employee dishonesty coverage (also called a commercial crime endorsement) is an add-on offered by some insurers. It can reimburse you if an employee steals merchandise or cash. You may need a police report to get a payout.

If you buy a business owners policy (BOP) you will get all of the coverages above minus the employee dishonesty coverage, which you must buy separately.

Theft accounts for 40% of retail shrink, and experts call these large thefts organized retail crime (ORC).

How Does Commercial Business Work for Theft Coverage?

Make a list of everything inside your shop and its value, including the cost of the building if you own it. Create digital files of scanned receipts and store them other than at the business. Taking photos and videos of your equipment, even items in storage, will help you document items in case they are stolen or destroyed. These receipts and lists will be instrumental in getting reimbursed for your losses.

What Is Retail Theft Insurance?

Retail theft insurance is commercial property insurance that covers the theft of inventory, equipment and other properties belonging to a business. It is a major component of a commercial insurance policy. Shoplifting, however, is not covered by property insurance because it’s difficult for insurance companies to account for losses. Commercial property insurance also will not cover theft committed by employees. To be covered you’d need a commercial crime endorsement, sometimes called dishonest employee coverage, added to your commercial insurance policy.

Retail Store Insurance Cost

Many factors go into the cost of retail store insurance, including the size and type of business and the amount of coverage needed. Retailers pay a median premium of about $65 per month, or $790 per year, for a business owner’s policy (BOP) which bundles the necessary coverages for a cheaper price.

Here are the factors that will affect the price of your policy:

  • Number of policies and endorsements
  • Policy limits
  • Business location
  • Number of employees
  • Claims history
  • Business assets
  • Business Type

How Retail Theft Insurance Can Help Your Business

Without retail theft insurance, you are on your own to pay for some expensive losses. Here are some of the common risks that retailers face that business insurance covers:

  • Accidents that injure customers or damage their property
  • Disasters and weather events that damage business property
  • Theft of or damage to merchandise, inventory and equipment
  • Data breach of computer systems
  • Loss of income after shutting down to repair physical damage to the business after an organized retail theft.
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What Is Organized Retail Crime (ORC)?

Retailers used “organized” to indicate when thefts are planned by one or more individuals, to generate individual or group financial profit, setting it apart from petty shoplifting. In short, it is organized retail theft when thieves resell your goods on the black market.

Some retailers are victimized by highly sophisticated criminals who steal incredible quantities of product. Other retailers are experiencing smash-and-grab or grab-and-run incidents. Still others are victimized by individuals, couples, and small groups who steal and resell online or at physical locations. ORC varies considerably, according to industry.

Organized Retail Crime and Violence

From the 2021 RILA study, here are some violence trends that accompany retail crime:

  • Retailers report retail thieves are more aggressive and violent than in years past: 65% of business owners saw an increase in violence, while 37%  said ORC criminals were much more aggressive than in the past.
  • In 2021 ORC was up 9 % and fatalities up 14 % from the previous year.
  • 86 % said that an ORC criminal has verbally threatened an associate with bodily harm.
  • Nearly 76 % reported that an organized retail criminal has physically assaulted an associate (punched, kicked, etc.)
  • Nearly 76 % surveyed said that a criminal has threatened the use of a weapon against an associate.
  • Over 40 % of APMs said that an organized retail criminal has used a weapon to harm an associate.
  • 81% of respondents said that there was more aggression and violence associated with retail crime over the past year.

Top 10 ORC Targeted Items in Stores:

  1. Apparel
  2. Electronics
  3. Health and beauty
  4. Accessories
  5. Footwear
  6. Home furnishings
  7. Home improvement
  8. Office supplies
  9. Food and beverage
  10. Children’s items

10 U.S Cities Most Affected by Retail Crime

  1. Los Angeles, CA
  2. Oakland, CA
  3. San Francisco, CA
  4. New York, NY
  5. Houston, TX
  6. Miami, FL
  7. Chicago, IL
  8. Sacramento, CA
  9. Seattle, WA
  10. Atlanta, GA

Criminals are hitting stores, sometimes multiple times, to sell their wares on the black market.

How To Prevent Retail Theft in Your Retail Business

Unfortunately, in high-theft areas, retailers are often forced to either lock up products using restrictive devices, such as locking cases, locking peg hooks, keeper boxes, and pull tags, but customers often end up buying the product online.

Of the businesses that took part in the National Retail Security Survey on Organized Retail Crime 2022, many are taking proactive measures to stop retail crime. These were the new methods they are implementing to secure their stores and cargo:

How Retailers Are Fighting Retail Theft

% Implemented

RFID systems 


AI-based POS/SCO video analytics 


License plate recognition 


Self-service locking cases or lockers 


AI-based perimeter surveillance 


Advanced weapon detection (AI, thermal, etc.) 


Facial recognition 


Multi-sensor parking lot or curbside surveillance towers/units 


AI-based access control 


Gunshot detection


Autonomous security robots 


AI-based spill detection 


AI-based behavior detection (e.g., violence or theft) 


Fingerprint or other identification requirements at POS/SCO 


Many of the statistics in this article were taken from The National Security Survey Organized Retail Crime 2022 conducted by the National Retail Federation.

Employee dishonesty coverage (also called a commercial crime endorsement) is an add-on coverage.

Retail Theft FAQs

What can I do if my employees are stealing merchandise and cash?

If you have proof, report them to the police. Employee dishonesty coverage, also called a commercial crime endorsement, needs to be added to your commercial insurance policy for you to get reimbursed for losses in the future.

Do retail thieves usually get violent?

Since Covid there has been increased violence and hostility and the perpetrators are using masks to hide their identities from security cameras. Thieves have increasingly been armed and threatening.

Key Takeaways

  • You’ll need a commercial insurance policy to get reimbursed for theft.
  • A commercial crime endorsement, or dishonest employee endorsement, will cover you if an employee steals.
  • Organized retail crime (ORC) is a serious problem, causing large losses to business owners without the right insurance coverage.

Every business is different, so it’s important to have an insurance agent who understands your concerns. If you are not 100% happy with your business insurance policy or coverage – or if you want to save money each month – compare quotes for free and get the comprehensive coverage you need for your thriving business. Begin by entering your zip code below and answering some questions.

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