Why Crime Insurance Should Not be Overlooked

Small businesses today have a lot to think — and often worry — about when trying to run a successful business. One worry small business owners do not need hanging over their heads is the worry over how they will recover if or when crime happens to them. Unfortunately, crime insurance is often an afterthought for small business owners. Failing to pay attention to this need can cost small businesses big. Here’s why.

Employee Theft

According toJack L. Hayes International, Inc.’s Annual Theft Survey, “on a per case average, dishonest employees steal 5.5 times the amount stolen by shoplifters.” In the year 2012, employers recovered over 50 million dollars from 71,095 employee apprehensions. Those are jaw-dropping numbers that only represents those who were caught. Businesses that lack crime insurance are not covered for the losses that aren’t recovered each year.

Employee theft isn’t limited to those with their hands in the cash drawer either. Employees take merchandise, transfer funds, and do countless other financial misdeeds that cost employers a lot of money over the course of a year. Preventative measures such as checks and balances, distributing financial responsibilities, surveillance systems, and more can only do so much to determine those who are determined to take from their employers. Crime insurance helps you recover the losses when those preventative efforts aren’t enough.

Other Crimes to Insure Against

Crime is a fairly large term that covers a lot of ground. In addition to coverage for employee theft and funds transfer fraud, employers today need additional coverage to protect them from things like counterfeit money and/or money orders, on-site robberies, forgeries and/or alterations, theft of cash money or securities, computer fraud and acts of vandalism or destruction of property.

The thing about crime is that it strikes when least expected. Many businesses don’t even realize they’ve been targeted, particularly by employee theft or retail theft, until storewide inventory is being taken. In some cases, the business never catches on to the exact circumstances of the theft, though they are certain there is money or merchandise missing.

It’s important to take action now, to make your small business a more unattractive target to “would be” thieves.

  • Assign different people to order inventory and to check it in. This reduces the likelihood of theft greatly because one person isn’t in charge of both sides of the transaction.
  • Keep accurate financial records and reconcile all bank statements monthly.
  • Protect passwords and other account information. Security is critical in the information age, that’s why it’s so important to make sure that you adequately defend sensitive passwords and other critical information from prying eyes.
  • Create policies that discourage employee theft. Enforce those policies aggressively.

You cannot wipe out all possibilities of crime in the workplace, but small actions, such as these, can go a long way towards reducing it. More importantly, it lets you know that crime is occurring sooner so that you can get to the bottom of things while the trail is still warm. A comprehensive commercial crime insurance policy will cover the rest.