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Why Your Company Needs Employee Dishonesty Insurance

March 22, 2018

Many business owners are unaware that employee theft insurance is an additional insurance policy rider, and that standard business insurance policies generally do not cover dishonest employee acts.

Employee theft insurance is labeled differently by insurance providers. For example, it might be called “Fidelity Insurance or Bond,” “Theft Insurance,” “Employee Dishonesty Insurance,” “Crime Fidelity Coverage,” or “Commercial Crime Policy.” It is a business owner’s responsibility to ensure that their business is covered, regardless of what an insurance provider calls it. This insurance is essential and relatively inexpensive.

Consider two cases in which the victim companies had employee theft insurance. In the first case, the victim company was grossly underinsured. In the second case, the policy failed to cover the cost of the forensic investigation and associated legal fees. Most forensic investigations exceed $10,000, and most thefts significantly exceed that amount.

An employee theft policy may state a loss limit, a per employee limit, or even a per position limit. We recommend that, at a minimum, an employee theft insurance policy cover unauthorized acts committed by current and former employees for forgery, alteration, computer fraud, credit card fraud, and/or electronic fund transfers fraud.

The appropriate amount of employee theft insurance coverage is dependent on the unique facts and circumstances of each business. Generally, the associated insurance premium increases with the amount of coverage.

Unfortunately, employee theft occurs on a regular basis. Employee theft insurance helps protect a business in the event of this unforeseen, and unfortunate, circumstance.

Do you want to know more about protecting your business? Contact  your MarksNelson professional at 816-743-7700.


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