Celebrating 80 Years | Articles from the 1960s
By Arthur C. Schreiber, LLB, Chief fidelity & Burglary Underwriter, Fund Insurance Cos., Western Department, Chicago
From AA&B January 1960
If the agent will induce his burglary risks to get the best burglar-resistive equipment it will accomplish two objectives. First, it will reduce losses to the almost non-existent point, and second, it will reduce the premium the insured pays to the lowest amount possible. The end result is that it leaves competition little to shoot at and thus keeps the risk on the agent's books.
In fact, the difference in the burglary insurance premium between the fire-resistive chest (this article is mostly about safes and chests) will pay for the chest after a time. Thus, the insured gets the good equipment free. How long a time it takes to make the saving depends on several factors; an especially important factor is the amount of coverage required, but to recover the entire cost of a chest in three to six years is not unusual.
For illustration, let's look at some typical premium rates for the Broad Form Money and Securities coverage. In the Bronx, New York, the difference in the annual rate per $1,000 for Broad Form coverage for a class I risk between a fire-resistive safe and an E burglar-resistive chest is $7. In Los Angeles the difference is $8 and in Chicago it is $9.50. In certain territories and for other classes of risks the saving can be considerably greater. Thus, in Cleveland for a class II risk the saving is $43 per year for $1,000 of Broad Form coverage.
An insured requiring $10,000 of Broad Form coverage and savings $8 on the per $1,000 rate would save $80 a year. In about six years or less the premium saving would pay the $300 to $500 cost of an E burglar-resistive chest. The life of the chest is many years longer than that, and during the remaining years the purchase would pay a handsome dividend.
Another way of looking at it is that the cost of the chest is a capital expenditure yielding the premium saving as a return. Where could one invest the cost of a chest and get such an annual return over the many years of the chest's life?
In addition to the saving in the rate, there is also the matter of experience credit. If a risk has been free of burglaries over a period of years, the insurance companies allow an experience credit. This credit will vary and may be as much as 50 percent, and for insureds requiring large amounts of coverage this saving can total a substantial sum of money. It is certainly worth while for insureds to protect this experience credit by installing good equipment.
Differences in Safes
The reason for the burglary premium differential between a fire-resistive safe and a burglar-resistive chest is easy to explain. Fire-resistive safes are built to withstand fires and not burglaries. Burglary underwriters making a stock remark that a skillful burglar can "open a fireproof safe with a can opener." A fire-resistive safe will have thick walls and a thick door, and so look very formidable to the inexperienced eye. But the steel is of light gauge and the walls are thick because of the fire insulation, and it is not fire insulation but steel that checkmates the burglar.
Burglar-resistive chests on the other hand may be made of thick blast-proof steel, have linings that resist torches and case-hardened steel plates to resist electric drills. Especial care is taken to protect the door. It may be constructed with heavy locking lugs which recess behind other lugs in the chest body just like the breech mechanism of an artillery piece. Hardened drill-resistive plate covers the combination locking mechanism, and care is taken to build the combination to resist manipulation. A relocking device may be built into the lock which will deadlock the main locking bolt when an attempt is made to drive out the locking mechanism. In addition a chest may have a separate relocking device which upon attack releases a completely independent locking bolt to lock the chest doubly.
Meeting Kidnap Threat
Burglars are resourceful, as indeed they must be to continue successfully their difficult profession, and they are constantly adopting new and novel ways of circumventing the businessman's protection. One way of burglarizing is to kidnap an employee who knows the combination and force him to open the chest.
This threat is now met by several devices. A time lock may be installed which makes it impossible to unlock the chest until a predetermined hour, which may be the hour of beginning work on the next business day. A lock may also be equipped with a delayed control device which delays the opening for a short period, say 15 minutes. Since the success of an attack usually depends upon a quick getaway, a delay of 15 minutes will defeat the burglar. Some chests have removable dials, and with the dial in the hands of one employee and the combination within the knowledge of another, the kidnapping burglar must kidnap two employees to bring his venture to fruition. Some chests with dual compartments may also be unlocked by two keys, both of which are necessary to open the door.
Of course, burglar-resistive chests are made in various grades and classes in order to suit the requirements of the purchaser. They are made in different sizes and may or may not be divided into compartments. Holdups may be foiled by having the combination lock equipped with an automatic electric alarm device which enables the owner, if he is forced to open the chest, to signal an outside source. Naturally, the finer the chest the more expensive it is, but the small businessman can buy an inexpensive chest which will adequately protect his money, securities and valuables.
The fire-resistive safe is in fact meant to protect books and records against fire, and might be aptly called a "record" safe. The burglar-resistive chest, on the other hand, is meant to protect money, securities and valuables against burglaries, and might fitly be named a "money" chest.
Not Fire-Resistant
One should be careful not to trust the burglar-resistive chest as protection against fire. The chest is constructed of steel and is thus an efficient conductor of heat. Paper money and securities in a chest would be burned to ashes during a building fire. A burglar-resistive chest anchored in a fire-resistive safe gives protection against both fire and burglary. In any event, the chest must be anchored to something for alone it is so light it can easily be carried away by the yegg and opened at his leisure. It may be anchored to the floor or encased in a concrete block, but what is a more logical solution than to anchor it to a fire-resistive safe and thus get both fire and burglary protection?
Even with an up-to-date, modern chest the businessman is not invulnerable to buglarious attack, for the art of the burglar has kept pace with the science of the chest manufacturer. An experienced burglar, given sufficient time, can breach any equipment. The idea is to make the job tough and give him as little time as possible. A burglar may spend considerable time "casing" his intended victim's establishment, and learn the entire operation before making an attack. This explains why so often burglaries occur when the exposure is the highest or the protection is in the fact that when a burglar "cases" an office he will pass it up because of the good equipment and turn his attention to that of the businessman less wise in his selection. Burglary insurance is indispensable for final protection, but with good equipment it may be purchased at a very reasonable price.
Safe Labels
Safes and chests are labeled so that the owner or agent can tell how well the installation will protect. This label will be found on either the outside or the inside of the door, or on the outside just above the door. The label is authorized by either the Underwriters' Laboratories, Inc. or the Safe Manufacturers National Association, and will tell what protection may be expected against fire and burglary from the experiment. If an owner or agent is further interested the safe companies will be happy to supply more information, not only about the labels, but also about the insurance premium savings involved.
Everyone gains by the substitution of burglar-resistive chests for fire-resistive safes as a protection for money and securities. The insured makes a large saving in his Broad Form Money and Securities premium, and the good equipment will go a long way toward assuring him that the saving will continue through the years. The insurance company writing the Board Form coverage will develop a better loss ration covering burglar-resistive chests than it will covering fire-resistive safes. Society gains by the reduction in crime. Even the chest manufacturers will make a profit in the manufacturing and selling of the equipment. Only the safecracker will feel that he is worse off, and most of us are not worried about him. In fact he may gain most of all, for if he is discouraged by the good equipment to make an attack he may be saved a term in the penitentiary.
The local insurance agent is the key individual in this set-up. He can bring the matter to a head by checking safe and chest equipment and wisely recommending the best equipment for the purpose to be accomplished. When the agent has induced his risk to get the best possible protection against burglary and it is favored with the lowest premium, it should be almost competition-proof.
