Corporate downsizing compromises internal controls. 9% unemployment. Record residential foreclosures. 50% of marriages are failing. Employees are facing increased pressure of addressing increased healthcare costs and the costs associated with taking care of aging parents. And yet, there are still many others that fantasize about what it would be like to live the life of the “rich and famous.” For business owners, today’s work environment is a challenging one.
As a result of many pressures, at times, good employees can be tempted to misappropriate corporate funds. Don’t be mislead, the term misappropriate is synonymous with “embezzlement” or “employee theft.” While we have assisted many clients evaluate their internal controls in an effort to mitigate any potential loss, and we have investigated dozens of embezzlement cases, one often very simple and inexpensive recommendation is often overlooked: employee dishonesty insurance.
Fiduciary insurance is one of the least expensive forms of insurance a business can obtain. It protects the business if an employee should ever misappropriate funds, securities, or other corporate property such as inventory or equipment. Despite this, many business owners don’t purchase it or feel that they need it. Others have never heard of it or thought that their existing property and casualty policy covered employee theft only to find out later that they were not covered.
Wondering if your business is adequately protected against employee theft? Post a comment below or contact our Valuation & Litigation Advisory Services Group at 440-449-6800.