Employee Theft? No way…right?
Every employer – whether a corporation, a small business, or a non-profit – provides a level of trust to employees, a belief they have the company’s best interest at heart. However, as we know, that is not always the case. Sometimes, the only interest an employee has in mind is their own.
In just the past 2 months, we have had four clients experience Employee Dishonesty claims. These claims range from $25,000 to $300,000. Each situation is unique in details but similar in execution. The entity trusted an employee to do what is right with the company’s best interests in mind and, in turn, the employee slowly siphoned money undetected for personal gain.
While Employee Dishonesty coverage would help to protect and replace theft of funds, there are important policies and procedures to have in place to avoid it in the first place:
1. Ensure no one employee has sole access to financial accounts
2. Make sure your financial books are audited by a CPA annually (or more)
3. Be sure to review the audit with a management team or board of directors
4. Be sure to reconcile bank accounts with deposits or withdrawals
5. Require two signatures on checks
6. Require employees or officers take annual vacations of at least five consecutive days.
It can happen to you. The question is, will you simply allow it to happen or take steps to avoid it?