When you can’t prevent employee theft and fraud, your insurance should be there to support you

As a business owner or member of leadership, the last thing you want to consider is that your employees could be committing theft or fraud against your company.

While rare, it does happen. Luckily, there are things you can do to prevent employee crime from happening in the first place. And, if it does occur, having the right insurance policy in place can be a lifesaver. Take this story of corporate fraud, for example:

Two employees at the Center for Toxicology and Environment Health in Arkansas were tasked with purchasing cellphones for employees and subcontractors. Over the course of years, these employees store over half a million dollars worth of tech products, sold them on the internet, and pocketed the money. Both recently pled guilty to wire fraud conspiracy and were sentenced to federal prison time and repayment of the stolen funds.

Sure these employees were “bad apples” – no doubt! But, company oversight was obviously lacking as well. Here are some tips to help prevent situations that lend themselves to fraud:

  1. Always review payments and purchases to vendors to make sure that services were actually performed and items were actually received

2. Monitor your bank and credit accounts and hire an auditor to conduct an investigation if anything does not appear correct

3. Work with an independent, third party auditor to routinely examine receipts and financial records for signs of fraud

4. Don’t rely on a single manager to oversee all financial matters: distribute responsibility across the organization for checks and balances

In addition, here are some signs that you can look for in employees that might indicate they are conducting, or planning to conduct, theft or fraud:

  • – Never taking a day off
  • – Being overly protective of their workspace and trying to prevent managers or others from accessing it
  • – Frequently requesting to work from home, or to work hours that the office is empty
  • – Seeking to work without supervision.
  • – Financial records disappearing or seeming to have been modified
  • – Sudden unexplained changes in behavior
  • – Coming in early or staying late to avoid contact with other employees or managers
  • – Owing expensive possessions beyond his or her income level
  • – Inquiring about information that is not necessary to perform his or her job
  • – Certain customers or clients only working with that staff member and refusing to work with anyone else

The truth is that oversight is the best way to prevent employee crime from happening to begin with. But, not all crime is preventable. So, what else can you do to protect yourself? Your business liability insurance may or may not include coverage for employee crimes. Make sure it does – and provides adequate levels of protection based on your business. Click here to schedule a no-cost, no-obligation insurance review and consultation!