Can you insure your business against employee theft?
While you don’t expect your employees to steal from you, it happens. In fact, employee theft is more prevalent than you would think, costing employers more than $50 billion each year. According to the Hiscox Embezzlement study conducted in 2017, small and medium sized businesses accounted for approximately 68% of employee theft cases.
Stealing cash from the company safe or cash registers and check fraud are two of the more common forms of property theft committed by employees, but employee theft can range from the “physical” stealing of small items such as sticky notes, pens, and other office supplies, to large equipment such as computers or products from your company and selling them on Craigslist or similar websites.
However, employee theft can also involve stealing data, such as customer information, and selling that information to your competitors or creating a credit card for the company and using the funds to pay for personal expenses. An employee can take bribes or kickbacks from a vendor in exchange for overinflating that vendor’s bill.
Unfortunately, the standard commercial general liability policy doesn’t cover losses from employee theft. But, the good news is that employee theft coverage, one of the key types of coverage that falls under a commercial crime policy, fills a part of the coverage void left by more general liability policies.
Planning for the worst
Protecting against employee theft is crucial to the financial interests of your business. Employee theft insurance covers the theft of your business property, securities, or money. The theft could be committed by one employee, a group of employees, or an employee(s) acting together with a person or persons outside of your business. One caveat — owners and partners of your business are not covered by this type of insurance.
When you make the decision to purchase employee theft insurance, the insurer will, in many cases, recommend other loss control techniques and may help you to develop stronger internal controls by defining checks and balances, oversight, and separation of duties. In addition, they may recommend that you employ stronger security measures such as security cameras and, if warranted, security guards.
Another issue to consider, if you’re a business owner, is the threat of employee violence in the workplace. In addition to the immeasurable suffering that comes after a mass shooting event in the workplace, the losses and liabilities resulting from that event can be massive. Mass shooting insurance is meant to provide coverage for expenses associated with gun violence events that may not be included in more traditional business insurance coverage.
Getting the best outcome
As a business owner, keeping your business secure from the threat of employee theft as well as violence in the workplace is essential because these actions could have a significant impact on the profitability of your business. An insurance broker can do the legwork and find the coverage that best suits your particular situation.
Interested in finding an insurance broker in Los Angeles? Daniel Fraisse, independent insurance broker and agent, has over 30 years of experience working with many of the major carriers. Dan Fraisse will compare the different types of coverage from different insurers to provide you with better rates. Because these types of policies do have coverage exclusions, he will ensure that you have a thorough understanding of your policies.
Call us today to get the best protection for your business.