Claim Type




Theft is a leading loss source for businesses in the technology industry. Almost 30 percent of property losses are related to burglary, theft, fidelity and vandalism, and malicious mischief claims. Less intuitive are trends that emerge when examining the details related to these types of loss. The following is a summary of insights gained by analyzing these loss trends. By breaking the industry down into similar operations and examining the target commodities, we are able to identify, in greater detail, factors contributing to loss and the impact of these type of losses.

Electronic Component and Hardware Manufacturers and Distributors Property claim data shows burglary, theft and other crimerelated incidents, such as fidelity and vandalism and malicious mischief claims as both the most frequent and highest severity type of loss. Target Commodities More than half of these incidents involve theft of stock, primarily:

  •   Computers
  •  Consumer electronics
  •  Computer peripherals
  •  Electronic components Contributing Factors
  •  80 percent occurred on premises
  •  “Smash and grab” style attacks
  •  Alarm systems disabled
  •  Access from adjacent vacant spaces
  •  Possible insider involvement

    The Impact

  • Average claim – almost $40,000
  • Largest claim – almost $350,000

  • Many claims included damage to buildings and equipment, in addition to the value of stolen property. In some cases, these incidents resulted in business interruption claims.


    Suggested Guidelines

    Protect facilities where high target stock is stored.
    Electronic components, hardware and devices are vulnerable stock.


    Administrative Controls

  • Employee background checks
  •      ? References and criminal background for those with access to target stock
  • Limit employee access to target stock
         ? Stock appropriately segregated and access granted only to those employees needing it to perform their job function
  • Inventory procedures with dual accountability
         ? Both scheduled and surprise inventories of target stock should be conducted. Responsibility for counting should be rotated to ensure accuracy and prevent fraudulent counts.
  • Visitor policy
         ? Sign-in, escort, visitor badges
  •  Premises access
         ? Control access to perimeter doors (including loading areas, etc.) to prevent unauthorized and/or unrecognized access 


    Physical Security
  • Use a segregated storage area for high-target items, such as an alarmed cage, room, safe or vault.
  •      ? Choose appropriate physical protection required based on the attractiveness of the commodity:
         ? High value-to-size ratio
         ? Ease of transport
         ? Marketability
         ? Memory chips and modules, processors (CPUs), graphics chips (GPUs) and flash memory require the highest protection because of their value, small size and marketability—safes and vaults or equivalent protection should be used.
         ? The second tier of target items for this industry includes: hard drives, mother boards, video cards, laptops and consumer electronics. Because of their size, it is typically harder to segregate but, at a minimum, alarmed cages, rooms or access controlled sections of a warehouse should be used.
  •  Exterior crash barriers such as concrete bollards, fencing and gates should be provided for all perimeter openings vulnerable to vehicular or other “smash and grab” type attacks.
         ? All grade level exterior openings, such as roll-up doors or store fronts that are vulnerable to vehicular attack, should be protected.
         ? Accessible glass windows or doors should be protected by gates or bars, impact-resistant polycarbonate, or glass with impact-resistant films applied.
         ? Exterior doors should be provided with deadbolt locks and door latch shields to prevent forced entry.
         ? Building exterior should be well lit.
  •  For multi-tenant buildings, the exposure created by adjacent occupancies must be carefully evaluated.
  •  For high-risk neighbors, such as a vacant space with no alarm coverage, protection must be provided.
         ? React quickly to the exposure created by adjacent tenants moving out.
         ? Assure alarm coverage is provided for the vacant space and/or provide specific alarm system coverage of adjoining wall.

    Facility Monitoring and Alarm Systems
  • Provide a Central Station Burglar Alarm System meeting the following requirements:
         ? UL-listed alarm system components should be used.
         ? Installation should be to UL standards.
         ? UL-listed central station monitoring should be provided.
         ? Line security should be provided.
         ? Back-up power should be provided.
         ? Coverage should be provided for all accessible openings.
         ? Reliable response should be provided—maximum
         ? 30-minute response time.
         ? A UL-certified alarm system should be considered when high values of target items are present.
  •  CCTV-recorded video surveillance is a deterrent to employee theft and may also provide remote monitoring capability for alarm verification.
Goods in Transit
  • Use generic packaging, avoiding readily identifiable product descriptions or logos on your shipping cartons.
  •  If company vehicles are used to transport high-value goods, the vehicles should not display markings or logos that would assist criminals in identifying and targeting the cargo.
  • Track shipments to the intended destination and make sure recipients are alerted to the expected delivery date and time.
  •  When receiving or preparing shipments, avoid leaving loaded trailers in unsecured yards or lots outside of normal operating hours.
  •  When common carriers or trucking companies are used, make sure to investigate the company security procedures and history of losses. Also, be sure to declare shipment value such that adequate compensation will be received in the event of the loss of the shipment.
Office Security
  • As indicated, office environments can expose computers and other contents to theft loss.
  •  Physical barriers with controlled entry points should be utilized to isolate offices in general and areas within offices, such as server rooms, where there are concentrations of computer equipment.
         ? Barriers should be of substantial construction.
         ? Barrier walls should be of true floor-to-ceiling construction.
         ? Options for the control of entry point controls include locks, guards, badges, electronic access controls, etc.
  •  Unescorted access to facilities by visitors should not be allowed other than by authorized contractors and consultants.

         ? Require background checks for consultants or contractors who may have unsupervised access to facilities – janitorial services, for example.

         ? Verify and record the identity of all visitors.

         ? Train employees to challenge unrecognized visitors.

Laptop Security

Laptop computers are vital tools used by a wide population of technology-industry workers. Since laptop computers and handheld devices are not typically used in a fixed, securable location, additional measures are needed to protect them.

  •  A formal security policy detailing end-user responsibility for securing these devices and the data they contain is essential. Devices should never be left unattended.
  •  Cable locks and docking stations should be used but only when the device is left in a secure location, such as an office, for short periods. ? These security methods are easily compromised and higher security options should be used when leaving a laptop in an office overnight (locked in storage area, file cabinet, etc.)
  • Travel procedures should address common high risk situations:
         ? Avoid storage in automobiles.
         ? Do not leave devices unattended in hotel rooms.
         ? Airport – security area, check-in counters, baggage claim, restrooms, food courts and curbside pick-up areas are all high-risk areas for theft of portable devices. Warn end-users to maintain extra vigilance in these areas. 

    Potential losses associated with exposure of sensitive data stored on stolen laptop and desktop computers can be much greater than the cost associated with replacing the stolen equipment. A key finding of the Ponemon Institute’s The Cost of a Lost Laptop study conducted in 2009 was that the average value of a lost laptop was $49,246.  This value is based on seven cost components: replacement cost, detection, forensics, data breach, lost intellectual property costs, lost productivity and legal, consulting and regulatory expenses. Occurrence of a data breach represents 80 percent of the cost.

    Therefore, it is important to take additional steps to prevent losses related to data breaches associated with the theft of data storage devices and media.
  • First, carefully evaluate the need for storage of sensitive information on any type of portable device or removable media. In many cases, it will be determined that the need for storing information on these difficult-to-secure devices is not worth the benefit given today’s threat environment.
  •  Where possible, prohibit such storage in an information security policy but also evaluate technical means of preventing this data leakage—disabling or monitoring usage of USB ports, content filtering and other methods are possible.
  •  If it is determined that storage on portable devices or removable media is absolutely necessary, this data must be protected and encryption is the most common means of doing so. 

    Encryption is the process of making data unreadable except to those who possess the appropriate key to decode and read the data. Many of the state breach notification laws do not mandate notification of affected parties if the
    data involved is encrypted. will submit your claim to your insurance company, meet with the adjusters and negotiate an equitable resolution to your theft claim.

    Call for a consultation to explore all your options in dealing with your theft claim. 1-800-303-2591