Employee Dishonesty Insurance

Employee dishonesty insurance is designed to cover financial loss caused by fraudulent activities of an employee. This type of insurance is also known as, “employee theft” coverage and is intended to cover theft of monetary funds, whether it be stolen cash, unauthorized credit card purchases, fraudulent checks, etc. and theft of property, such as business property (i.e. computers) or retail items. 

Theft coverage is often included in most business property policies; however, this type of coverage is intended for theft by an individual that is not an employee. Employee dishonesty insurance is sometimes included at a small limit. You may also choose to add this type of coverage by including it as an endorsement on your current business policy. 

With employee embezzlement on the rise, it is recommended that you consider the addition of this type of coverage to your current policy. According to The Association of Certified Fraud Examiners (ACFE), it is estimated that businesses lose approximately $400 billion per year, for a total of about 6% total annual revenue.

If you believe your company will not be affected, consider the following: 

          Small businesses are often most devastated by employee theft, because they are not large enough to absorb the losses.

          Companies with higher turn-over or more part-time employees are often victims of employee theft.

          Full-time employees are also a threat. In fact, employees with a long term history (10+ years) with the business make up 25% of workplace theft. 

Additionally, if you think it won’t happen to me…consider the current economic times. More people, including your employees, are becoming more desperate and willing to go to extremes that they would not normally consider to accumulate extra cash. When considering whether to add this endorsement to your business policy, consider the amount of access your employees have to various items, such as cash, credit cards or retail products.