Can Small Business Insurance Protect You From Employee Theft?
Running a successful business requires many things, but preventing employee theft, sometimes referred to as shrink, needs to be a top priority when it comes to protecting inventory and resources. Unfortunately, virtually every business will experience employee theft at some point, and some industries are more prone to employee theft than others.
For example, retail and food service businesses are more likely to face threats from employee theft when compared to IT businesses or manufacturing sites since tangible items in retail chains and restaurants are often available in large quantities and locations are loosely supervised. It’s also important to note that thefts of small items, such as office supplies, can add up quickly, and over a period of years, stolen pencils, pens, and yes, even red staplers, can cost a business big time.
Preventing Employee Theft
The first step in preventing employee theft is to properly and thoroughly screen candidates who are seeking employment with your company. Applicants for positions in your company need to have a background check conducted in order to ascertain criminal history, and during the interview process, the topic of previous theft can be broached.
If an employee has a record of stealing, especially from an employer, he or she will likely not be a good candidate. When considering criminal history or admitted theft from a previous employer, take into account how long ago the incident occurred, how old the applicant was, and the dollar amount of the item or items stolen.
Next, inventory control systems need to be put into place and reviewed regularly so that discrepancies can be noticed and tracked. Finally, you may consider investing in contract security or in-house security services that are in charge of monitoring employees, both openly and covertly.
Not All Thefts Are Outright Physical
While most employee theft is of physical objects, this is not always the case. In some circumstances, an employee may steal a service through the use of physical products. This may occur when an employee is using company resources in order to benefit himself or herself. An example of this may be where an employee is using company-owned smartphones for personal use, thereby driving up costs.
Likewise, an employee may use a company-owned printer for his or her own commercial interests, costing the company hundreds of dollars a year. In these cases, inventory control and monitoring systems are all the more important, and this is also where your company’s budget and expenses need to be audited on a regular basis in order to identify problem areas.
How Business Insurance Can Help Protect Against Employee Theft
In addition to preventative measures when hiring or supervising employees, business insurance products may be available to cover your company in the event that employee theft takes place. Depending upon the circumstances and your policy protections, business insurance can reimburse your company after an employee has stolen physical or intangible items or services.
To learn more about business insurance for situations involving employee theft or potential employee theft, contact the experts at Poms & Associates using this convenient contact form.
Andrew Rusnak is an author who writes on topics that include business insurance and corporate security.