There are many reasons why someone at work does something dishonest. From taking supplies to lying about time worked to financial theft, the opportunities are endless for employees to act without integrity. The Association of Certified Fraud Examiners (ACFE) explains it as a triangle of Employee Dishonesty supported by financial pressure, opportunity to be dishonest, and rationalization. Because this sort of fraud occurs more regularly than we like to think, businesses need to have methods of handling it when it’s discovered.
The Cost of Employee Dishonesty
The ACFE also reported that business losses are estimated at $400 billion every year due to fraud and embezzlement crimes from employees. Small businesses are just as susceptible as large firms when it comes to vulnerability.
When an employee comes onboard it’s almost expected that they’ll work in good faith and honesty. No hiring manager wants to believe that the person they just hired is going to delve into any kind of employee dishonesty. Regardless of someone’s outlook on a new hire there needs to be an implementation of a workplace policy centered around employee dishonesty. While some offenses may not be cause for termination, having a well-drafted, easily understood policy enforced can help any employer defend the discipline they lay out.
And while creating an easy-to-understand policy is important for all companies of all sizes, staying on top of shifts in employee dishonesty is also key. Employee conduct that’s not on the level today may not be considered as bad tomorrow. If a company already has a workplace policy focusing on employee dishonesty, then reviewing on a regular basis and making the appropriate updates will help to stay ahead of the curve.
Covering Your Loss
One way to defend against employee dishonesty is with insurance specifically designed to cover companies in the event of a loss of some kind. This kind of insurance can be purchased as a separate policy or come with a packaged policy. Employee Dishonesty policies can cover everything from specific employees or all employees, while also extending coverage to non-employees (or former employees) who may have access to commit theft.
While having a thought-out policy in place is key and creating an environment of integrity and trust can go a long way, being able to cover your company in this capacity can be a difference in saving money and losing big.
About Financial Guaranty Insurance Brokers
Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (626) 793-3330 to speak with one of our professionals.