Employee theft is generally defined as an employee’s unauthorized use, theft or misuse of business assets. According to the 2018 Report to the Nation by the Association of Certified Fraud Examiners (ACFE), worldwide estimates of employee theft and fraud reach to the trillion-dollar level.

Given the staggering financial loss estimates noted above, are you ready to examine your business’ exposure to risk and the ways in which to reduce your risk profile?

The reality is every company faces some sort of employee theft risk, if left unmanaged. The good news is there are simple ways to protect your business from the risk of employee dishonesty and fraud.

Employee Dishonesty Insurance Coverage

Employee Dishonesty Insurance coverage is a prudent part of every business’ risk management policy. This type of coverage offers great value as it protects employers from purposeful acts of deceit by employees. Acts of deceit generally take the form of the theft of money, private information, company assets, or property, among others. This type of insurance is especially critical for small (or new businesses) that are typically unable to absorb most losses.

Employee Dishonesty Insurance can be written as a part of a more comprehensive crime fidelity policy package, or as stand-alone business insurance coverage. This theft insurance can be modified to cover each employee, non-employees, or named employees — the choice is yours.

While each insurance provider might offer slight variations to their version of an employee dishonesty policy, a business owner should anticipate business insurance coverage options for -

• Unauthorized Electronic Funds Transfers.
• Money Order Fraud.
• Theft of Securities, Property or Money.
• Computer Fraud.
• Acts of Forgery.
• Credit Card Fraud.
• Counterfeit Fraud, to name a few.

Employee Dishonesty Insurance Endorsements

Insurance Endorsements add to or amend an insurance policy. When deciding on the employee dishonesty insurance policy’s specifics for your business, consider these endorsements–

• An endorsement that sets up an Employee Retirement Income Security bond (ERISA), or
• A 3rd Party endorsement, which extends insurance coverage to the client with whom you are working, as long as there is an existing written contract between you and the client.

Employee Dishonesty Insurance Exclusions

Typical insurance exclusions related to Employee Dishonesty Insurance Coverage include errors and omission for accounting or math. Additionally, vandalism or the seizure of property by a government agency will likely be excluded from the employee dishonesty coverage.

The Take-Away

While the concept of employee dishonesty insurance is straightforward, this insurance coverage works best when fine-tuned to meet the needs of each company. For expert advice, contact the professionals at the Hummel Group –who are ready to help you create the employee dishonesty insurance coverage that meets the specific needs of your business. Or, give us a call at 800-860-1060.

TIps & Tricks to Avoid Employee Dishonesty

Check out this video about  Employee DIshonesty coverage and get tips and tricks from Matt Yost on ways to prevent employee theft.

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