Employee theft is a huge concern for any sized business, but it can hit the smaller companies harder than larger corporations. A fidelity bond can help a business recover from instances of employee theft or dishonesty, yet the best way to deal with employee theft is to put procedures in place to minimize a company’s exposure to it.
ContractorMag.com talks about how the biggest thieves are on your payroll, which is an interesting read for those that have employees. While you would like to think that everyone working for you has the best interest of your business at the top of their mind, this may not be the case. Don’t go about business as usual hoping that an employee won’t steal from you. Make sure you have the right procedures in place to prevent employee theft in the first place.
Three things have to occur in order for employee theft to take place. An employee must have a reason to steal from the company, such as the need for extra money to pay bills, support a drug habit, or maybe a pay off gambling debt. The employee has to rationalize their actions, convincing themselves that they are justified in stealing. And finally, an employee has to have the opportunity to steal. This is the part that you, as the business owner, can have some control over by putting processes and procedures in place to detect fraud.
This is where larger businesses are better equipped than the small guy, and why a large company loses less from employee fraud than the small business owner. Large companies tend to have proven procedures in place to detect employee fraud, where the small company owner typically doesn’t because they either don’t know that they should, or they feel like they will never fall victim to employee theft.
Any company, no matter the size, that has employees in a position to steal must have procedures in place to prevent, or make it very difficult to pull off, employee theft. Also, a fidelity bond can help a business recover from an employee theft, should it occur. While purchasing a fidelity bond to help recover from employee dishonesty is a great idea, it is better, and may be cheaper in the long run, to also have procedures in place to prevent, or detect, employee theft in the first place. If an employee feels like they will be caught if they steal, they will most likely be less likely to commit the crime in the first place.
Don’t make the mistake of thinking your general liability insurance policy will pay for employee theft or fraud, because it won’t. Your business general liability insurance coverage protects against third party liabilities (customers and the general public) and will have exclusions against covering items such as employee theft. This is why you need to have a separate fidelity bond as supplemental business coverage.
Don’t just put your head in the sand and hope that your employees don’t steal from you. This is a sure fire way to find yourself in a compromising situation. Instead, get a free business insurance quote for a fidelity bond or any other supplemental coverage your business may need. When you request a free online business insurance quote you are under no obligation to actually purchase coverage. Instead you can compare your options until you find the right plan that you are comfortable with, from a business insurance provider you can build a long term relationship with.