Protect Your Business Against Employee Dishonesty and Theft - Paul & Dixon Insurance

Protect Your Business Against Employee Dishonesty and Theft

While there are many risks business owners need to consider, one often-overlooked risk—and it’s a big one—is employee dishonesty and theft.

This includes embezzlement, on-site money, and securities theft, and theft of electronic information or assets. Examples include taking money out of the cash register, stealing products from shelves or inventory, forging checks, illegally using credit card information for personal use, and more.

These crimes are surprisingly prevalent; according to a report from the U.S. Chamber of Commerce, about 75 percent of all employees will commit theft at least once in their careers.

Although your Business Insurance Policy probably includes some limited coverage for this type of risk, it may not cover you for large-scale incidents of crime committed by your employees. Fortunately, you can get special a Business Crime and Employee Dishonesty Insurance Policy that covers your business against such losses.

Of course, if you know and trust all of your employees or have a very small business, you may think you don’t need special insurance to protect your business against employee crime. Think again!

Believe it or not, this type of crime is often committed by a long-trusted employee whom you would never suspect. And the smaller the business, the more catastrophic the results can be.

In a 2016 report, the Association of Certified Fraud Examiners (ACFE) reported that small businesses suffered a median loss of $180,000 due to employee crime and dishonesty. Could your business survive such a loss? If it’s like many small businesses, the answer is “Probably not.”

In fact, it’s been estimated that a third of all failed businesses can trace their failure to employee theft. Without special Employee Crime and Dishonesty coverage, the actions of just one well-trusted but dishonest employee could destroy the business you’ve worked long and hard to establish and grow.

In addition to getting special insurance coverage, here are some things you can do to protect your business from employee dishonesty and crime:

  • Conduct background checks and get references for all potential employees.
  • Establish and enforce a clear zero-tolerance policy against dishonesty and theft. In addition to obvious acts of thievery, include things such as “stealing time” by falsifying time cards, giving discounts or free merchandise to friends and others who are not eligible for them, and other acts of dishonesty.
  • Invest in surveillance equipment, POS systems, and other equipment and software that help to mitigate risk.
  • When and where possible, have more than one employee balance accounts or closeout cash registers. Make sure employees understand that failure to report a co-worker for theft or dishonesty is a violation of your anti-theft policy and can lead to termination.
  • Train your supervisors to be on the lookout for suspicious activity, and pay attention to signs that your employees may be using drugs or having financial difficulties—situations that might make them more likely to steal.
  • Play it safe! Learn more about employee dishonesty and theft, understand the risks, and know the specifics of your business insurance coverage.

Paul & Dixon is here to help!

Visit our website for more information on Crime Insurance, and contact us to schedule a complimentary review of your business’s insurance policy today.


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New Bedford, MA 02740


4436 Acushnet Ave
New Bedford, MA 02745