While most businesses generally obtain insurance packages to provide coverage for business property damage and liability claims, they often overlook one key area of insurance, that being coverage for employee dishonesty. Most employers would like to think that this would never be an issue for their companies, but the facts simply do not bear this out. It does happen. And when it does, it is often for large amounts, which the company is ill prepared to cover. Our insurance broker advised that while most business packages do include dishonesty coverage, it is only for a very small amount—usually in the $10,000-$20,000 range. Should such an event of employee dishonesty occur at your business, it is most likely to far exceed that limited amount of coverage, which could lead to a major loss for your company not anticipated or planned for.
Most people often only think in terms of cash defalcations. But in actuality, cash is not the exclusive exposure area. For example, loss of inventory is an area often ignored where huge losses can also occur. There are other classes of assets as well.
The lesson from this is that our business owner clients should review their business coverage to see precisely what amount, if any, employee dishonesty coverage is currently included in their insurance packages. Then an honest assessment of exposure areas and the possible exposure amounts should be made, followed by a meeting with their qualified insurance broker to determine what adjustments to coverage might be in order.
Michael W. Margrave