All businesses need to employ active measures to protect themselves against crime, including those that are committed by their own personnel. Crime insurance is an effective tool to help shield businesses from losses sustained as a result of employee crime.
How Employee Theft Can Affect Businesses
Businesses that have excellent hiring practices and stringent security still must contend with the possibility of internal theft. Examples of crime insurance claims handled by insurance carriers include a wide range of situations. In most instances, employees take advantage of their position and access to companies’ resources in order to steal products or assets, misappropriate corporate funds, or rob a company’s clients. Here are examples of actual claim scenarios:
- Unauthorized use of a company credit card for personal purchases
- Embezzlement of funds from a condominium association’s operating account
- Fraudulently directed wire transfers from a financial institution
Planning and Protection
Businesses need to utilize careful financial procedures that limit employees’ access to funds and create a chain of accountability. Accounts need to be monitored, and it’s preferable to have them periodically audited by third parties.
Employee theft can go undetected for an extended period of time, so losses can be substantial. It’s important for businesses to safeguard their operations with insurance coverage that will effectively protect their operations.