How well do you know and trust your employees?  Do you think any of them would ever steal from you?

Nearly every small business owner says ‘No Way!’ when we ask that question.  Yet, here are the alarming statistics:

  • According to an estimate by the U.S. Chamber of Commerce, it’s believed that 75% of employees steal at least once
  • The incidence of employee theft is 15 times greater than external theft
  • 30% of business failures are caused by employee theft or embezzlement

Now do you think it could happen to you?

Due to the fact that most business owners don’t like to think about the idea of an employee theft, they leave themselves underinsured or worse – completely uninsured.

While you may feel confident your employees would never steal from you, or that your business would never be the victim of theft, the harsh reality is that nearly every business is eventually victimized by fraud or theft.

In today’s digital world, thieves (and potentially your employees) don’t need direct access to cash to steal from you; merchandise, supplies and securities are all fair game.

You could also be susceptible to losses in the event your finished products, or even raw materials, are stolen.

Essentially, any product can be a target for thieves if there’s an opportunity to make a resale profit.

The following examples represent common types of claims we see where employees were stealing from their employer:

  • Keeping two sets of books
  • Stealing from the cash drawer
  • Stealing merchandise and materials
  • Charging inactive accounts
  • Paying bonuses to those that are not supposed to receive them
  • Increasing amounts on checks and invoices after they have been paid
  • Paying bills to companies that don’t exist and then cashing those checks
  • Reducing the amounts of outgoing invoices in the books, paying the reduced amount in cash, and then appropriating the customer’s check
  • Padding payroll and cash expenditures
  • Not crediting cash payments
  • Removing ledger sheets from the business to cover up shortages
  • Invoicing materials below sale price and receiving the undercharge from the customer
  • Issuing checks for goods that were not returned
  • Stealing incoming payments and applying that money to subsequent remittances

Insurance solutions to combat theft

Here are some policies that can safeguard your business against theft:

  • Employee theft coverage protects your money and your business against theft, both from inside the organization, and out.
  • Depositors forgery or alteration coverage protects against losses by forgery or alterations of checks, drafts, promissory notes, orders or directions to pay money that is drawn upon you, or is drawn upon your accounts by someone acting as your agent.  This could also protect against forgery losses inflicted by people other than employees
  • Theft, disappearance, and destruction coverage protects against loss of money and securities by way of theft, disappearance or destruction while the property is on your business and/or banking premises.  This coverage protects against losses as a result of attempted or actual robberies while the property was on your premises
  • Robbery and safe burglary coverage protects against loss of money or securities on your premises, or while in the custody of a messenger outside of your premises.
  • Computer and funds transfer fraud coverage protects against loss of money, securities and other property via computer fraud.  Also covers money that is directly related to the use of a computer to fraudulently cause a transfer of property from your premises or banking premises to someone or some entity outside of your premises
  • Money orders and counterfeit currency coverage protects against losses that are not paid upon presentation, or are in the form of counterfeit United States and Canadian currency paid in exchange for goods or services.

Other safeguards against theft

In addition to purchasing insurance protection against theft, consider implementing these safeguards in your business:

  • Secure raw materials, semi-finished goods and finished goods in walled, fenced or locked areas on your premises.
  • Limit and control your employees’ access to storage areas, and consider implementing a key management program.
  • Inspect merchandise and goods thoroughly when they’re received as shipments.
  • Ensure that there’s more than one employee inspecting outgoing and incoming shipments.
  • Conduct periodic inventory counts, and compare that information to your records.
  • Implement a concrete strategy for handling returned merchandise.
  • Establish a line of authority at your organization, and ensure that everyone is acting responsibly.
  • Separate your accounting and operating functions.
  • Create a paper trail for each transaction.
  • Screen new employees to weed out applicants that are potential liabilities.
  • Continually train employees concerning how to detect theft and encourage honest behavior at your organization.
  • Make sure that the enforcement of rules is consistent and constant.
  • Do not tolerate employee theft on your premises, and consider prosecuting offenders.
  • Require mandatory vacations for personnel handling payments.


Theft can be a sensitive issue, but it’s imperative that you take the necessary measures to protect your business and your assets. Don’t let your business be one of the 30% who fall victim to theft and never recover.

Contact us today to learn more about the different types of Crime Insurance coverage available to protect your business. Coverages vary based on the type of business you conduct, its size, and what your vulnerabilities are.

One of our Licensed Insurance Advisors can discuss all of our coverage and theft protection solutions, and help you find the right coverage for your business.

To get started immediately, simply Request a Proposal, or give us a call.