No businessowner wants to think about an employee stealing from them.  Nor does a businessowner want to think about their vendors stealing from them.  Even if we don’t want to think about these things happening, the reality is, it most likely has or will happen.  Do you really know what your business insurance covers or what different types of crimes are considered in your coverage package?

Examples of employee dishonesty include: taking merchandise, taking supplies, padding employee’s time card, or helping themselves to change from the till.

What if your copy machine repair person takes an envelope of money sitting on a table nearby him/her intended for the pizza delivery arriving at lunch time?  Is this an example of employee dishonesty?   Most likely, it is not.  Many policies do not cover the actions of employees not directly on your payroll under the employee dishonesty coverage.

Beyond the obvious burglary, employee pilferage includes many fraud schemes such as skimming which is taking cash before it enters the books or records for your business.  Accepting payment for something and not recording the transaction is another example.  Larceny is stealing cash after it has become part of your records but before it can be deposited in the bank.  An example of larceny may be taking cash from the register.  Billing schemes involve issuing payment for fraudulent invoices submitted by an employee.  These are just a few examples of ways employees can pilfer from your business.

What can you do to protect yourself and your valuable assets?

  • Screen employees
  • Conduct surprise audits
  • Personally look into customer complaints
  • Do not share the alarm code with employees
  • Implement guidelines and policies with a zero tolerance clause
  • Be aware and mindful of disgruntled or stressed employees

Mitigating employee fraud or dishonesty has become a necessary part of doing business.

If you have specific questions about employee dishonesty, give your agent a call.

— Jen Aultman | Risk Management Consultant