Pecuniary insurance provides a business with protection against financial losses stemming from a variety of causes, from crimes such as fraud or embezzlement to legal expenses to business interruptions.
Key Distinction
Pecuniary insurance is distinct from casualty insurance, which covers hazards such as fire or weather. Pecuniary insurance deals only with financial losses.
Theft and Accident Coverage
Pecuniary insurance reimburses policyholders for monies lost to theft or accident. For instance, if money is stolen by robbers during a physical transfer of cash, the loss would be covered. Losses would also be covered if cash were destroyed in a fire.
Fidelity Guarantees
Policies can also protect a business from losses due to fraudulent, dishonest or criminal conduct by its own employees, such as accountants.
Business Interruption
If a policyholder can't open for business -- because the business itself is damaged by a fire or tornado, for example, or because of civil disorder -- a pecuniary policy may cover the losses that result from the interruption of business. It will not, however, pay for damage to the business itself; that's for a casualty policy. The policy limits the amount of lost business time a company can claim; this time frame is called the indemnity period.
References
Writer Bio
A writer since 2007, Chandra Anderson has been published in "Boating Obsession," and on Gather.com and Poetry.com. Her online content appears on various websites, where she specializes in a wide range of topics including personal finance, boating and animal behavior.