Employee Dishonesty Insurance

If you have employees who handle money or securities or are in a position to compromise the value of your assets through a dishonest act, you need this insurance because you have exposure to financial loss. Most commercial package (generally meaning a policy for a Named Insured that includes property protection of some sort and also liability protection of some sort) policies normally exclude this coverage or may include only nominal coverage for employee dishonesty, so you may want to buy a separate fidelity or crime policy.

It does not have to be complicated! Most of our team members have experience helping client firms analyze the client’s exposure based upon the agent’s vast experience. Let’s share a discussion about worst-case-scenarios before you may experience an accusation of some sort of employee theft or dishonest action.

Some common examples are:

1. A waitperson at a late night establishment processes a credit card for an inebriated guest who doesn’t notice a substantial upcharge (which may be pocketed by the waitperson as a generous gratuity) or that staff member may snap a quick mobile phone photo of the card and may pass it to a friend via SMS text, and that third party utilizes the card data to purchase goods and/or services of some nature before the patron knows what happened.

2.  An outside repair person of a service business takes payment for a service  facilitated in the field and pads the payment to generate an excess of some amount that the repair person may enjoy.

3. Tech support at an internet service provider helps coach a subscriber of their services through a challenge in any sort of online payment process as an act of service, but may see the credit card information as it is entered by the subscriber and make a note of it. That individual may delay utilization for days or weeks, then make an attempt at a purchase of just a dollar or two to fly beneath the radar, as it were. If the payment is successful, then a much larger purchase of goods may be ordered and mailed to a third-party mailbox service that is untraceable, or may use the data to purchase some service that is unregistered and untraceable, leaving the initial customer dumbfounded as to how their card was charged for those services.

4. Lastly, a small to medium sized bookkeeping concern or CPA firm may be closely held, meaning that the principals of the company may believe that as a small, local community member. They are so small, in fact, that they feel no need for two-party signatures on checks or maybe they don’t want to pay extra time for frequent second-checking of accounts. Embezzling often occurs in tiny amounts over months, years, or even decades. Desperate people do desperate things. Perhaps they felt that someone owed them, the owner makes too much money anyway, has an unexpected medical expense, or just needs to borrow a little, but had intended to pay it back later. the company that employs these persons can be responsible, and part of that commitment may need to include a line item on the insurance package.

If you can see any of these prospective situations occurring in your company then considering transferring that risk to your insurance carrier by endorsement may be an excellent investment.