Most business owners don’t want to imagine their employees stealing from them; but the truth is, fraud and theft affect nearly every business at some point. In today’s digital age, criminals, including those inside your organization, don’t need to take cash to hurt your bottom line. Merchandise, inventory, checks, data, and even customer payments can be targeted.
Common Employee Theft Tactics
Internal theft can take many forms, including:
- Charging inactive accounts
- Padding payroll or issuing checks for goods never returned
- Creating fake vendors and cashing company checks
- Skimming payments or altering invoices
- Falsifying records to hide missing inventory
These schemes often go undetected until the losses are significant, sometimes hundreds of thousands of dollars.
How Crime Coverage Can Help
Crime insurance offers a financial safety net when your organization is targeted. Here are key coverage options to consider:
- Employee Theft Coverage
Protects against losses caused by dishonest acts from employees, whether it’s cash theft or misuse of company property. - Forgery or Alteration Coverage
Covers check or document tampering, even when the fraud isn’t committed by an employee. - Theft, Disappearance, and Destruction Coverage
Provides protection for money and securities stolen from your premises, including during a robbery. - Computer and Funds Transfer Fraud Coverage
Helps cover losses related to fraudulent computer-based transfers or digital fraud. - Robbery and Safe Burglary Coverage
Offers protection for money or securities stolen during a break-in, whether on-site or while in transit with a trusted employee or courier. - Public Employee Theft Coverage
Useful for municipalities and public institutions, with options for per-loss or per-employee limits.
Preventive Steps Businesses Can Take
Insurance is essential, but prevention is equally important. Implementing the following internal controls can reduce the likelihood of theft:
- Separate financial duties like billing, collections, and reconciliation
- Conduct regular audits and surprise inventory counts
- Implement access controls for sensitive areas or financial systems
- Use a paper trail for all transactions
- Screen new hires carefully
- Provide regular training on ethics and theft detection
- Require mandatory vacations for staff managing payments
Theft can be a difficult topic to confront, but ignoring the risk puts your business in danger. Crime insurance is a smart, proactive investment that helps you recover financially when something goes wrong and ensures you’re not left footing the entire bill.
To learn more about how to build a crime coverage plan that fits your business, reach out to McHugh Insurance Group today.