You may always want to assume the best in people, but sometimes employees can be a little bit less than honest. Maybe a few dollars disappear from your cash register, maybe some merchandise finds itself missing, or maybe the expense report that you left up to an employee is more than a little off each month. In any case, employee dishonesty insurance can be a great asset to your business, whether you’re in a particularly risky industry or you’re a small business that wants to prevent sticky fingers. Here’s how.
What is Employee Dishonesty insurance?
Employee dishonesty insurance is a type of crime coverage that can help you recover inventory and revenue should an employee jeopardize your business by misusing funds or stealing.
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What does employee dishonesty insurance cover?
A typical employee dishonesty policy could cover employee actions that fall under:
- Safe burglaries
- Computer fraud (i.e., hacking, using a computer to get customer information)
- Credit card fraud
- Tampering with checks
- Fake invoices and receipts
As a business owner, you know that it takes all types of employees to run your business. So, it’s important to note that your employee dishonesty policy can also protect you against the actions of:
- Current employees
- Seasonal employees
- Former employees
- Independent contractors
- Directors & Officers
What’s special about employee dishonesty insurance?
You may have heard of a few other types of insurance that can protect your business from the actions of your employees. So, you may be wondering, “Why should I have employee dishonesty insurance specifically?” Well, here are some of the differences between those types of coverage and employee dishonesty.
Errors & Omissions coverage
Errors & Omissions coverage can be vital for a business that offers advice or where your employees are expected to be experts on a particular topic. It’s more for if an employee misspeaks or misrepresents your company. So, E&O insurance can cover mishaps where an employee may not have been acting maliciously, but they still had a slip of the tongue, were negligent, or gave some bad advice.
It happens to everyone, but in certain businesses, it can cost your clients money. So, if a client decides to sue your company for one of these reasons, Errors and Omissions coverage can help you cover the fees associated with the lawsuit, whether you’re found to be at fault or not. While this type of employee behavior can put you at risk, it’s not necessarily made for covering damages done by your employee to your business in particular.
Directors & Officers coverage
Directors & Officers coverage is more so used if someone makes a harmful claim against one of your business’s higher-ups. This type of coverage is made to help a company take care of legal fees if one of your officers is accused of:
- Sexual harassment
- Mismanagement of funds
- Deformation of Character
- And other employment practice liability issues
It can also help you defend that officer if they’re accused of stealing from a client.
Tips to prevent employee theft.
You can take steps to reduce the chances of employee theft happening at your business. Here are a few tips:
- Do background checks on your employees.
- Make sure that all of your employees are clear on your employee theft policy and understand the consequences of it.
- Ensure that the drawer balances out after each shift.
- Be diligent about doing inventory.
- Use clear trash bags so no one can sneak things out.
- Flag voids or refunds that look suspicious. Have witnesses for when voids or returns happen.
Overall, employee dishonesty insurance can be a part of a comprehensive crime insurance policy. It could also be a separate plan altogether, depending on your current business insurance plan or insurance carrier. That’s why it’s important to talk to your agent about what your policy covers and how much it can reimburse you for.
Our experts are perfect at finding the right types of insurance to protect you from employee dishonesty. Our agents will help you find the best rates on the business insurance you need. Call us today or fill out our online form to start comparing multiple, free quotes.