A lot of business owners have been saddled with the task of handling the immediate losses associated with theft and embezzlement issues. This includes determining whom the culprit is, dealing with the legal aspects, and taking steps to prevent any future instances.
Experiencing loss is a part of doing business, but this can be very expensive and should be addressed through a commercial crime insurance policy wherever possible. Most policyholders will want insurance coverage to respond to lawsuits and formal investigations immediately following the crime against their businesses.
Business owners must be vigilant against theft, and the most common types of theft are by employees and trusted financial advisers. Therefore, it is important to learn some signs that an employee is embezzling and we’ll provide some tips for protecting your business from employee theft and embezzlement.
Crime insurance needs vary from one business to another
Every business is different and each one needs to figure out their insurance needs and options. Most employees who commit acts of fraud or embezzlement often exhibit signs of their actions or behavior. For example, if someone working for you suddenly show up to work in an expensive new car, or is living beyond their means, they should be watched a little more carefully, and not be left alone to handle finances and cash.
Someone having financial difficulties, or that is spotted having unusually close relationships with vendors, or exhibit excessive control issues, should be red-flagged. By being alert and vigilant, you may be able to detect and prevent these business losses from occurring.
Keeping track of petty cash and making daily deposits can reduce your exposures. Try not to leave cash lying around, as this is simply too tempting for some employees, and reconciling the bank statement each month helps you catch irregularities sooner rather than later. You should also require that all petty cash transactions have a petty cash slip or log to support them, and require two signatures on petty cash refill checks.
Once you catch an employee stealing or embezzling be prepared to prosecute, as being caught and prosecuted is the biggest deterrent to crime. Being lenient, or “feeling sorry for them” isn’t going to keep them from stealing from your business or their next employer. Speak to an agent about your crime insurance policy needs.