Crime Insurance Overview

It was on last night's news. Another business has lost over $100,000 due to an employee theft. There was also a holdup at a local gas station recently.

Crime insurance provides coverage against loss by theft, burglary, robbery, and employee dishonesty. Policies can include protection for forgery, counterfeit currency, and loss of money.

Issues to Consider:

-Do you have enough employee dishonesty insurance? Half of all thefts in the US is caused by employees. Get quotations from your insurance agent for higher limits of coverage.

-Be aware of the insurance coverage exclusion included in most policies for employees who have committed past dishonest acts.

-Consider making criminal background checks as a part of your hiring process. Have new employees sign wavers that will allow you to check for criminal records, past employment records, and driving record.

-Demand honesty in all business dealings. Let applicants know that misstatements on employment applications of prior education and work history will result in termination.

-Do you have enough insurance coverage to protect you from theft or destruction of cash that is on your premises or in route to your bank?

-Are incoming checks marked "for deposit only" ASAP after they are received?

-Are employees required to take regular vacations? Embezzling employees have to often perform "juggling acts" to cover up their thievery. Mandatory vacations can increase the chances that an employee is caught.

-Does the employee who reconciles your bank accounts have authority to sign checks? Separation of these duties increases the oversight of your bank accounts.

-Is inventory stored away from employee entrances to prevent property walking out the back door?

-Are regular inventories taken to uncover shortages of stock?

-Inspect outside trash dumpsters regularly. They are often used to hide stolen merchandise.

-If you use a payroll service to process payroll taxes, do you audit their work? Are they really making the deposits to the IRS?

-Consider video cameras at register and stock storage areas. Cameras in public areas and parking lots can also help with liability claims where people sue for slip-and-fall injuries.