Burglary cover is one of the most frequently used elements of corporate property insurance, and at the same time the area where the most disappointment arises. The police open proceedings for “theft”, the company's loss is real, yet the insurer declines the claim – because the policy covers not theft but burglary, and between the two there is a boundary drawn precisely in the conditions. As a broker, I see that at retail and service companies the most common case that falls foul of the conditions is not the forced door, but theft committed with a key, by a trick, by sneaking in or during opening hours. This article is about that boundary: what counts as burglary, what does not, and what cover nevertheless exists.
- “Burglary” in insurance is a concept of the policy conditions, not of the Criminal Code (Btk.): Hungarian conditions typically require forcible entry into locked premises leaving visible marks, or the use of a false key or of a key obtained through burglary or robbery.
- Entry with the original key, sneak-in theft, distraction theft and theft during opening hours typically count under the conditions as simple theft, which property insurance excludes apart from burglary – together with inventory shortfalls, disappearance and employee dishonesty.
- Some insurers offer a separate clause for theft committed with a key or for limited simple theft, and a violent incident during opening hours falls within robbery cover – none of these is automatic, and each differs from insurer to insurer.
What do the conditions call burglary?
“Burglary” in insurance is not a concept of the Criminal Code but of the contract, and each insurer words it differently – but the common core is the same. Under one Hungarian all-risks condition, burglary is when the perpetrator enters locked premises unlawfully, leaving visible marks, by force against property, or with a tool other than the premises' own key that is not intended to open that lock, or with the premises' own key obtained by robbery as defined in the conditions; the typical form of force against property is breaking open a door or window, or breaking through a wall, ceiling or roof. Another insurer's conditions also include cases where the perpetrator hid before the premises were closed and left by force after closing, as well as the forcing open of locked containers – cash registers, safes, steel cabinets – during opening hours. The conditions treat robbery as a separate event: taking property by violence or by a direct threat to life or physical safety – I wrote about this in the burglary and robbery article. Whatever falls outside the definition is not paid for under burglary cover – not because the insurer does not want to pay, but because it is not the insured event.
The four typical “not burglary” cases
Entry with a key. If the perpetrator opens the lock with the original key or a copy of it – a former employee, a cleaner, the spare key left under the flowerpot, the bunch of keys forgotten in the car – there is no forcible entry and no visible mark. Conditions typically treat this as burglary only if the key was obtained by robbery – under some conditions, by burglary or robbery – and the company can prove it. Sneak-in theft. The thief who walks in through a back door left open, through an open window or into a warehouse left unattended during loading is the classic case of “simple theft”: conditions typically exclude it, and some conditions accept only a forcible exit after hiding inside. Distraction theft. A person posing as a “technician” or inspector who gets in and then takes something has not broken in either: there is neither force nor a false key. Theft during opening hours. Goods, a laptop or tools disappearing from the sales floor, from in front of the workshop or from beside the reception desk during opening hours are theft from the point of view of burglary cover; Hungarian conditions typically expressly exclude theft other than burglary, and likewise inventory shortfalls, disappearance, fraud, embezzlement and employee dishonesty. The police classification – petty theft, theft committed by force against property – is useful evidence, but it does not decide the insurance question: that is decided by the definition in the conditions and the marks recorded at the scene.
Why is the boundary so strict?
The insurer sizes the premium for burglary cover to the risk the company has protected itself against: locks, bars, alarm, security guarding – conditions typically tie the payment and the limits to mechanical and electronic security levels based on the recommendations of MABISZ (the Hungarian insurers' association), as the security measures article explains. But a security level is worth something only when the premises are locked: a door left open, a key handed out, a sales floor left unattended during opening hours are risks the insurer cannot assess, and proof is also uncertain – no marks, no time, no method of commission. That is why the cover draws the line where the loss can be established objectively: the forced lock, the broken-through wall, the opened safe. This is neither the company's fault nor bad faith on the insurer's part, but the nature of burglary cover – and that is precisely why you need to know that theft committed with a key or during opening hours is a different cover question.
What can nevertheless be covered?
There are several options, but none is automatic, and each differs from insurer to insurer. Some insurers offer cover for theft committed with a key by a separate clause or as an add-on – typically on condition that the company reports the loss or theft of the key without delay, has the lock replaced and documents its key management. An incident during opening hours may fall within robbery cover if it involved violence or threats; for mere taking of property, some conditions give limited simple theft cover, others none at all. Cash kept in the till and the safe is subject to the separate limits and storage rules described in the cash and valuables article. Equipment kept away from the site – in a car, at a client's premises, at an exhibition – is not covered by the site burglary cover; that calls for off-premises cover or equipment insurance. If an employee is the perpetrator, this is typically excluded from property insurance and is a matter for separate fidelity (employee dishonesty) insurance. I cannot promise any of these; what I can say is that the risk – the number of keys, opening hours, unattended zones – has to be gone through during the assessment, and the premium, limit and conditions of add-ons vary from offer to offer.
What should the company do so that a loss qualifies as burglary – or so that there is no loss?
Key discipline is the simplest protection: a key register, a lock change or code change when an employee leaves, spare keys not kept around the building. The closing routine: at closing time every door and window locked and the alarm armed, and the warehouse not left unattended even during loading. The security self-check list asks about exactly these points. If a theft does happen, the sequence is the same as after a burglary: undisturbed scene, report to the police, photos, list of missing items, notification on the insurer's claims line – as described in the what to do after a burglary article. In the police report and in the claim notification, describe precisely how the theft was committed; if there were marks – prying, a damaged lock, a forced window – have them recorded in the police report as well. The insurer pays only for what is an insured event under the contract; in a case that is stuck or disputed, I help where I can, acting on the company's behalf, but I cannot change the definition – that can be done only before the contract is concluded, by choosing the appropriate add-on.
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Sources
- K&H all risks property insurance contract conditions, point 2.2.4.1 – definition of burglary and robbery; points 2.2.1 and 2.2.3 – excluded types of theft
- UNIQA All Risks property and business interruption insurance conditions (31 July 2024), points 2.6.16–2.6.17 (burglary, robbery), point 2.2.2 r) (exclusion of theft other than burglary)
- MABISZ (the Hungarian insurers' association) Property Protection and Loss Prevention Committee: burglary protection guide (mechanical and electronic security levels)
- Hungarian Criminal Code (Btk.) – Act C of 2012, Section 365 (robbery), Section 370 (theft) – the criminal-law classification is not the same as the insurance concept
