Employee theft might seem like a small issue to manage. After all, businesses have to deal with outside theft affecting their bottom line. However, as much as $50 billion is stolen every year from employees, making it one of the most costly and widespread challenges businesses face today.
To limit these losses and risks, it’s important to look at how this theft is executed and how to prevent it. One way is through comprehensive coverage, such as FL Employee theft insurance, which provides financial backup for companies when it comes to losses. Another is understanding the different types of employee theft and their impact on businesses.
Types of Employee Theft
From taking home office supplies to stealing money from the cash register, employee theft comes in many forms. Here are a few commonly recognized types of fraud:
- Larceny: Taking cash or property from a business. This category covers everything from taking cash out of the register, as noted above, to stealing inventory.
- Billing Schemes: Setting up a false vendor account and paying the vendor, which is just the disguise employee.
- Embezzlement: Theft of cash or property by someone in a position of trust, like an accountant or senior executive.
- Expense Reimbursement: Padding expense reports by adding items that were not business-related.
- Time Theft: This is a prevalent example of employee theft, as most employees might not consider it to be stealing. This crime is committed by using company time to conduct personal business.
Operational Risks
The damage done by employee theft is the cause of nearly a third of business bankruptcies in the U.S. To cover the losses caused by employee theft, a company may have to lower payroll by releasing employees, delaying key personnel promotions, and putting company expansion plans on hold.
Psychological Effects
Employee theft causes the employer to step up security measures that affect the entire workplace. Tension in a company arises between management and staff when stricter rules are put into motion to prevent theft. This includes surveillance cameras, identity badges, and restriction of employee access to materials.
The persistence of internal theft when effective measures aren’t in place leads to other workplace crime instances. Businesses need to put forth risk management plans and pair them with adequate FL employee theft coverage to minimize as much loss as possible.
About The Hilb Group
Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Founded in 2009, the Hilb Group has been helping clients to make sense of their options and make the smartest choices for their circumstances. Whether you need Warehouse Insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (800) 776-3078 for a consultation.