Some of the business insurance coverage we offer here at Hastings Mutual, including our main Businessowners policy (it’s an optional coverage) features the Employee Dishonesty endorsement, which we describe this way:
It’s unfortunate, but it doesn’t have to be a danger. This endorsement will pay for direct losses caused by a dishonest act by an employee.
If that sounds like the type of insurance coverage that would be useful for your business, talk with your local independent insurance agent about adding it to your policy. But I’m bringing it up right now because preventing employee dishonesty is better than compensation for a loss from employee dishonesty.
SCORE, a nonprofit mentoring group for small businesses that partners with the U.S. Small Business Association, has learned from experience and offers a number of ideas to strengthen your business against employee dishonesty.
This is a good guideline for a lot of reasons. You probably know a lot about your co-workers and people who work for you already — a feeling that you would work well together is probably part of the reason they were hired in the first place. So if something is “off” about an employee, like a radical change in behavior or strong opposition to you putting a new policy in place, it may be because they’re doing something they shouldn’t be.
If someone manages your company’s money, make sure that person is trustworthy. Bring in a separate, unbiased auditor to check over all your finances periodically. Track income and expenditures using a computer system to reduce the risk of error and so you can look at the books at any time.
If you suspect an employee of wrongdoing, be sure you investigate thoroughly. A false accusation can lead to a lot of damage to your business and your reputation. At the same time, theft needs to be treated like the serious crime it is. It can put a company out of business, and a lot of people out of their jobs.
Hopefully you never have to deal with a dishonest employee, let alone a situation that leads to firing or even getting law enforcement involved. If you do, though, it will be some relief to know that your Hastings Mutual policy with an Employee Dishonesty endorsement is there to cover your losses.
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