Law Firms Accounting Firms & Title Agencies beware of hidden costs of employee theft/data breach
Whether it is office supplies, time theft, privileged information or money, employee theft creates significant costs for firms. According to the U.S. Chamber of Commerce approximately 75% of all employees steal from work in some way, and employee theft causes about 30% of all corporate bankruptcies. The greatest threat to firms is from the inside.
The following steps help lessen employee theft and its impacts on the organization:
1. Develop anti-theft policies by having very clear policies prohibiting stealing, outlining what constitute stealing, and the consequences when the employee is caught stealing. Employees should acknowledge in writing that they understand and will comply with the policy.
2. Before hiring perform background checks to appropriately screen all job applicants. A comprehensive background check includes a criminal and civil history check, verification of education, review of state bar records or state CPA organizations (where applicable), past employment and references. Preform credit checks on individuals who access money or sensitive data (such as data that can be used for identity theft). Follow the Fair Credit Reporting Acts when performing background checks.
3. Insure separation of duties for jobs that handle sensitive information, money or credit cards. The individuals handling monies or sensitive information should not do reconciliations of information.
4. Where possible rotate responsibilities.
5. Enforce vacation policy for staff making sure that all staff takes at least one consecutive week off a year where other staff members must “fill” in their absence.
If you find or suspect theft or data theft:
1. Investigate thoroughly before jumping to conclusions. Follow your firm’s procedures with any allegation. In order to avoid false accusation claims, allow the employee to share their version events.
2. If the theft involves sensitive data notify state agencies as well as clients of the data breach where required. Make sure to comply with all related data breach laws.
3. Notify your insurance carrier of the theft or data theft when appropriate.
Assess risks to address vulnerabilities. Developing internal controls helps prevent theft. Regular reviews and audits deter employee theft.
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Lee Norcross, MBA, CPCU
California License # 0D87292
L Squared Insurance Agency, LLC ® DBA in California as L2 L Squared Insurance Agency, License # 0L93416
Managing Director, CEO
Lee@L2Ins.com
616-726-7080
