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Employee Dishonesty Insurance

By: Thomas M. Kallman

Just about any company can feel the crippling effects of an act of Employee Dishonesty. You should be able to trust your employees. But the fact is one third of all employees admitted stealing from employers during the previous year. This problem is so widespread, the U.S. Chamber of Commerce estimates the annual cost of employee theft at $40 billion. Having to make good on the theft or misuse of Company property can cause financial hardship. Unlike fire or auto losses, a loss due to Employee Dishonesty can accumulate over time and reach devastating proportions before being discovered.

Employee theft ranks as one of the most under-reported crimes in the United States today. Many business owners victimized by employee dishonesty suffer severe financial damage and, in the worst cases, end up in bankruptcy. While the majority of dishonest acts are one-time or occasional thefts, long-term, ongoing schemes by one or more “trusted” employees cause most large losses.

Unlike losses due to burglary and robbery, losses due to employee dishonesty are excluded under all commercial property policies. Unfortunately, most business owners who choose not to be suspicious of the people working for them often overlook employee dishonesty insurance. This is a regrettable situation, as your most trusted employees are in the best position to use their knowledge of your business operations to steal or embezzle from you.

While no employer can completely eliminate the risk of employee dishonesty, there are several steps business owners can take to help minimize the risks. For example, checks should be stamped “for deposit only” immediately upon receipt and invoices should always be stamped “paid” to circumvent the chances of paying the same invoice twice. If one of your employees maintains your books, be sure that bank accounts are reconciled by someone other than the person who handles deposits and withdrawals. You might also consider instituting an internal audit system for all financial records and have an independent accountant perform a full audit annually.

Employee Dishonesty Insurance helps compensate the Company for Loss due to the acts of Employee Dishonesty of an Employee working alone or in collusion with others. Cover yourself, just in case..

You never know when employee theft can deliver a striking blow to your business. Small companies can be especially hard hit by theft and embezzlement, because they can’t afford extensive safeguards and aren’t large enough to absorb the losses.

An employee dishonesty crime coverage form provides coverage for loss of, and loss from damage to, money, securities and property other than money and securities caused directly by employee dishonesty. The Dishonesty Bond:

• Protects you and your customers from loss incurred by dishonest acts of your employees.
• Covers you against acts by all company employees, part-time and full-time.
• Can be obtained easily and inexpensively.
• No matter how large or small your business may be, securing adequate coverage is essential for protecting your business and your peace of mind.

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