Is Cash Covered On a Business Insurance Policy?
Business Insurance for Cash Coverage: What Business Owners Need to Know
Why Cash Protection Is Crucial for Your Business
With credit card processing fees continuing to rise—and more businesses passing those fees on to customers—many consumers are opting to pay with cash instead. Whether it’s for everyday items or larger service transactions, cash is making a noticeable comeback. While this can be a positive shift for managing transaction costs, it also increases your business’s exposure to risk. That’s why it’s more important than ever to review your cash coverage under your business insurance policies. Ensuring you’re properly protected means fewer surprises and more peace of mind should the unexpected occur.
Cash still plays a major role in many businesses—from corner shops and salons to restaurants and small service companies. If you regularly handle cash, you’re not just managing daily income—you’re also managing risk.
Whether it’s left overnight in a safe, in a cash drawer during the day, or on its way to the bank, that cash is vulnerable. Theft, fire, vandalism, and other unforeseen events can lead to significant losses if your insurance coverage isn’t up to par. That’s why understanding your business insurance for cash coverage is essential for safeguarding your livelihood.
What Does Standard Business Insurance Cover for Cash?
Most standard Business Owners Policies (BOPs) include what’s called Money and Securities coverage. But here’s the kicker: the default coverage limits are often much lower than your actual risk.
Here’s what typical coverage looks like:
-
On-Premises Coverage: This usually covers cash and checks stored at your business location. The standard limit is often $10,000, though some policies may go up to $15,000.
-
Off-Premises Coverage: This covers money while away from your business—think about making bank deposits or attending events. The typical limit here is only $2,500.
Let’s say you’re a retailer that does $10,000 in weekend cash sales and you deposit that Monday. If your policy limit is $5,000 and a thief grabs the cash from your safe, you’re potentially out $5,000 or more.
These limits can be raised by endorsing the policy and paying for the increased coveage limits. Talk to you agent to see what coverage you need for your business.
What Is Considered On-Premises Cash?
Cash and checks located in your business building or inside of a financial institution building fall under on-premises coverage. This includes:
- Cash in a register or drawer.
- Money kept in a locked safe or vault.
- Cash held for making change
- Basically, any business cash inside of of your premises building.
- Money being held while in line at a bank.
- Business cash in a safe deposit bax at the bank (remember the California fires that destryed banks and safe deposit box contents)
Many policies provide theft coverage for cash stolen during a break-in or robbery, but typically do not cover employee theft unless you add a special endorsement.
What Is Considered Off-Premises Cash?
Once your cash leaves your physical building, it becomes off-premises and is generally subject to different (and lower) coverage limits. With an exception of being inside of a financial institution building.
Examples of off-premises situations include:
- Cash anywhere outside of your premises building, even on the sidewalk in the parking lot of the business
- Cash in transit to a bank
- Money collected at a satellite location or mobile event
- Funds being transported by an employee or courier
This lower coverage often catches business owners off guard. You might assume cash on its way to the bank is fully insured, but if your policy only includes $2,500 off-premises protection, any loss beyond that won’t be covered.
Is Cash In Transit Covered?
Yes, but with caveats. Money being transported to or from your business—either by you, a trusted employee, or a courier—is considered off-premises under most policies.
So, what counts as “in transit”?
- You’re driving the deposit to the bank
- An employee walks to make a night drop
- A courier service picks up your deposits
Unless you’ve increased your off-premises limit, you might find your coverage falls short. And if you’re using an armored car service, some insurers may offer extended or separate protection. Always check the fine print.
How to Strengthen Your Business Insurance for Cash Coverage
If you handle large amounts of cash regularly, it’s time to think beyond the standard policy.
1. Increase Coverage Limits
You can usually raise the default limits for both on-premises and off-premises coverage. This is often cost-effective and significantly improves your protection.
2. Add Crime or Fidelity Bonds
Employee dishonesty coverage (also called fidelity bonds) protects against theft by employees. Many insurers offer this as an affordable add-on.
4. Utilize Professional Courier Services
Using a licensed, insured cash transport service reduces your risk and the couriers usually provide coverage while the money is in their control.
Additional Safety Tips to Reduce Risk
Insurers love when you take steps to minimize risk—and some may even reward you with lower premiums.
-
Always use a UL-rated safe for overnight storage
-
Limit after-hours access to cash storage areas
-
Install cameras and alarms at all cash points
-
Train staff in cash-handling procedures
-
Avoid routine schedules for deposits to reduce predictability
Frequently Asked Questions (FAQ) Regarding Business Insurance for Cash Coverage
Q1: Does business insurance cover cash stolen from a safe?
Yes, as long as it falls within your on-premises limit and wasn’t stolen by an employee (unless you have an endorsement for that). There would also have to be proof that the theft occurred, like forced entry or video evidence.
Q2: What is the difference between on-premises and off-premises coverage?
On-premises means cash stored at your business; off-premises applies to money in transit or held outside your primary location.
Q3: Is in-transit cash treated as on- or off-premises?
It’s typically treated as off-premises. Whether you or an employee is transporting it, you’ll need adequate off-premises coverage.
Q4: Can I raise my coverage limits?
Absolutely. Most insurers allow you to increase both your on- and off-premises cash limits for an additional premium. Call your agent to inquire.
Q5: Does Huff Insurance offer help selecting this coverage?
Yes! Huff Insurance works with multiple top-rated carriers to customize policies that protect your cash, whether it’s in your safe or on its way to the bank.
Why Choose Huff Insurance?
Huff Insurance has been serving Maryland business owners since 1960. We’re an independent insurance agency, which means we don’t work for just one insurance company—we work for you.
We partner with a variety of top-rated insurers to find the best combination of coverage, service, and price for your needs. Whether you’re a cash-heavy business or a small start-up, we’ll make sure you understand your options and feel confident your money is protected.
Final Thoughts Business Insurance for Cash Coverage
Business insurance for cash coverage isn’t just a “nice-to-have”—it’s an essential safeguard for your financial health. Knowing the difference between on-premises and off-premises coverage, recognizing in-transit risks, and understanding your policy’s limits are key to keeping your business secure.
If you’re unsure whether your current policy truly protects your business’s cash, don’t wait for a loss to find out. Talk to someone at Huff Insurance today at 410-647-1111.
