If you are an employer or in charge of supervising others who handle money in any business, you probably already know about this word…Trust. Customers hand you their cash and other modes of payment with that word in mind…Trust. They believe in the tenets of the fiduciary relationship shared with the person standing or sitting behind the desk.
Well, what happens when that trust is betrayed? When that employee you trust decides to use a customer’s money like it is theirs. Call it whatever you want, it is stealing. I speak with many business owners in my daily dealings and I have come across unspeakable amounts of money in the hundreds of thousands and in one case in the millions stolen from the company over 30 years by a trusted family member. This sort of event is unthinkable but as your profit defender its my job to shed light on this stuff.
Let’s play one scenario out. You find out an employee mishandled or stole money from the company; creatively or straight-out pocketed the cash. You can prosecute, fire them, get them arrested or even make them pay back. But what if they amount is too large and you can’t get the money back? How do you make up for lost profits?
Many business owners believe loss of money to employee theft is covered by their standard insurance policy but I want to sound the alarm through this blog that employee theft may not be covered. In some cases it is an item on the coverage list, but, what would a mere $50,000 coverage limit do if your comptroller stole $250,000 from your company? Clearly inadequate.
Its time to pull out that policy. Yes, the one you thought covered your business for everything. News Flash! There is no policy that covers everything. Besides putting an employee theft on your Business policy is not a good idea because of what a claim does to the cost of your policy when it renews. There is a bond you can use to buy more coverage and at the same time get more robust coverage. A crime bond or fidelity policy is a better vehicle to respond in an employee crime situation particularly in a technologically advanced world, you want a policy with much more coverage than basic theft. Bonds are also typically more affordable than insurance policies not to mention the added benefit of keeping the crime claims contained under the bond policy number. Last but not least there is the third party coverage which expands coverage to include property stolen from your company which belongs to third party but under your company’s care or custody.
It is time to call your Agent or Broker. Pull that policy and ask about crime, fidelity or employee theft coverage. Know the limit, ask about any exclusions or deductibles. Don’t wait for an event to make frantic calls. While I have awakened you to re-examine the trust in your workplace, its a good idea to put preventive measures in your operation. Make sure deposits are verified daily and separate the batch processing employee from the bank deposit personnel amongst other measures.
I worked as a bank manager in the past and was shocked to find out our head teller stole a few hundred dollars in quarters from the top of the vault, simply because she observed that we did a visual verification of the boxes of quarters and never opened them to verify. I opened the boxes when she went on vacation and the police handcuffs that greeted her on her first day back was a good lesson for the other staff but … still that was an act by our head teller.
Tough times make good people do questionable things. Lets protect your profits today. Call your Agent or call my office. (212)-568-5700 http://www.alphadrct.com
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