WHY DO I NEED EMPLOYEE DISHONESTY COVERAGE??

WHAT IS IT?

This insurance protects the employer from financial loss due to the fraudulent activities of an employee or group of employees. The loss can be the result of the employee’s theft of money, securities or other property of the employer.

WHY DO I NEED IT?

Fraud and embezzlement in the workplace is on the rise. The Association of Certified Fraud Examiners (ACFE) estimates business losses $400 billion per year or about 6% of total annual revenue. Small companies can be especially effected by theft and embezzlement because they can’t afford extensive safeguards and aren’t large enough to absorb losses. Workplace crime is carried out by employees 80% of the time. One in four employees who has committed fraud against their employer had been with the company more than ten years.

WHAT DOES IT COVER?

Stand alone policies are designed to cover employee thefts, robbery and safe burglaries. Coverage can also include:

    1. Forgery or alteration

    2. Funds transfer fraud

    3. Computer fraud

    4. Credit card fraud

    5. Money order and counterfeit fraud

On a personal note, My brother in law owns a small business which in many instances requires that you hire one person who you trust to undertake a broad range of responsibilities.  In his case, he hired someone who was in charge of paying bills, balancing books, depositing checks, etc.  After being employed for several years with his company, they found out that this employee had been stealing money and making unauthorized charges on company credit cards then covering them up with other expenses.  This can be a huge devastation for a small business that lives by cash-flow. 

In another example, a local trucking company recently found out that their controller has been embezzling money from them for a number of years to the sum of about $1.3 million.

Many times the people who are found stealing money from their employer are people who feel they are very trusted and might feel entitled to more money or benefits.  The worst thing an employer could do is assume that they have great employees who would never do anything to harm the company.  Employee Dishonesty insurance can help protect you against these financial losses.  If you questions about this or would like to discuss ways to ensure proper limits and coverage please contact me!