Are You Covered for Employee Theft?
Law Firms, Accounting Firms, Title Agencies and other small organizations spend a large amount of resources to combat the theft of funds from cyber criminals and other con artists. These outside thefts are well publicized by the media. But there is a dirty little secret that small entities ignore and many have no insurance for. People are surprised to learn the number one cause of theft for most small organizations comes from their own employees. These thefts can bankrupt a small organization if uninsured or underinsured.
Errors and Omissions insurance coverage generally does not provide coverage. The entity’s Business Owners Policy may provide some employee theft coverage. But it rarely provides the limits that are needed. A Cyber policy if properly endorsed can provide some protection as long as a computer is used. But this depends on the Cyber policy. Depending on the work done by the organization, a properly endorsed Crime Insurance policy may be the best option.
Hiscox Insurance Company writes Crime Insurance and Cyber/Data Theft Insurance throughout the US. Hiscox released study on employee theft. The Hiscox study found that over 80% of all embezzlement cases are with entities that have less than 150 people. These embezzlements mostly involved long term “trusted” employees. The law firm theft of funds crimes that we have seen have involved similar scenarios described in the study. The study also discusses the controls needed in an organization to help discourage employee embezzlement.
The Hiscox study briefly touches on the growing Cyber threat and steps that can be taken to help minimize this exposure.
If interested in reading the entire study click on:
Hiscox Employee Embezzlement Study