When business owners are asked the question, what makes your business successful, a recurring theme begins to appear in their answers… to some degree, most comments sound something like “it’s our people.”
That’s no surprise. For nearly all products and services delivered, the quality and value we receive is largely determined by the people responsible for providing these products and services to us. But what happens if your biggest asset becomes your worst nightmare?
Thefts committed by employees account for more than half of all commercial crime-related losses. In many cases, losses are large enough that the employer does not have the ability to absorb the loss. In fact, some experts believe that as much as 30% of business failures involve some element of employee theft or embezzlement.
The employee dishonesty exposure is more significant than most managers realize, yet only about 25% of mercantile businesses protect themselves with this coverage. These losses total billions of dollars each year.
Loss control techniques can go a long way to reducing employee theft. Regardless of the fact that there is or isn’t insurance coverage, loss control is imperative. A business should establish careful financial controls for handling of its funds. A retail establishment may have a policy of balancing cash registers twice a day, or may go as far as installing video surveillance equipment. Bookkeepers and financial clerks should always operate in a world of checks and balances, and no single employee should ever have total control of a business’s finances.
In today’s digital world, it’s no longer just a matter of safeguarding your physical cash on hand. It’s become increasing problematic for business to protect their “electronic funds” which has caused numerous business owners to supplement their insurance program with an element of employee dishonesty coverage. This coverage can help minimize the financial impact to the business if an employee is embezzling funds.
If you feel like this type of fidelity coverage might be needed in your operation, give us a call.