As a small business owner, you are probably concerned about crime by employees and its fallout on your business. To safeguard against any losses arising out of crime by employees, insurance companies offer employee dishonesty coverage. This insurance covers loss of money, bonds, or property.
It is meant to cover your business against criminal acts of any kind committed by your employees. It could be theft for the employee’s financial gain, or willful damage to your property with any motive.
When employees steal money, equipment, property of any kind, or securities like passwords or bonds, you can suffer huge financial losses. The coverage safeguards you from such loss.
2.Damage to Property
Willful damage to property by an employee out of rage, revenge, or any other motive can also cripple your business. It covers this kind of damage too.
One of the main drawbacks is that the burden of proof lies with the owner. Insurance companies pay for losses only if the owner can conclusively prove that the loss was due to theft by employees. It does not cover the following list of things.
1.Unexplained disappearance of Property.
2.Loss of employees’ property.
3.Damage that has been covered by another insurance policy.
It is meant to protect your business against any crime committed by employees. Some of the basic facts about employee dishonesty coverage are discussed below.
1.It offers blanket coverage for your business against theft by employees. All employees are covered under this policy.
2.The insurance limit is calculated on the basis of occurrences. If more than one employee is involved in a single instance of theft, the payout will be for a single occurrence.
3.The knowledge and discovery period of the crime covers the time elapsed between the theft and its discovery by a senior official.
4.The loss limit of liability is a one-time payment with no yearly aggregate.
Recognize The Threat
Employee theft is a real threat to businesses. Most insurance policies do not cover this kind of damage to business or property. It is a good idea to opt for employee dishonesty coverage. Don’t just pass it off as a hypothetical situation. If you have employees for any length of time, regardless of how well you screen them, the chances are some of them will end up stealing from you at some point in time. Be prepared for this occurence.
If you have any queries regarding the insurance coverage you should opt for, you can approach a small business consultant or insurance agent to help you choose the right employee dishonesty coverage for you. After all, you never know when a disgruntled employee may damage your property, or embezzle funds from your account.
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com