Why Do I need Crime Insurance?
An employer would never hire someone, if he thought that employee could potentially steal from him. However the harsh reality is that nearly every business will be victimized by fraud or theft. Technological advances have allowed thieves (including your employees) to not need direct access to cash to steal from you; merchandise, supplies and securities are all fair game. Raw materials or even finished products are susceptible to losses. Any product can be a target for thieves if there is an opportunity to make a resale profit.
Standard Property and Inland Marine Insurance do provide some protection from criminal acts, but often times they do not cover losses from employee dishonesty. Crime Insurance has been developed to circumvent the limitations of the other policies and extend protection that includes fraudulent activities of employees.
For example, the vice president of Koss, a Milwaukee-based stereo equipment manufacturer, was sentenced to 11 years in prison for embezzling over $30 million during a seven-year period. Similarly, an IKEA call center employee stole nearly $400,000 in 2009 by manipulating the company’s phone and mail order system to issue himself customer refunds.
Examples from larger companies often times garner more attention, but smaller companies may be more vulnerable to employee theft. Smaller companies tend to trust their employees more because they may be family or close friends which could result in fewer anti-fraud measures being taken.
Regardless of the size of your company, employee theft remains a very real possibility. It is vital to take the necessary steps to insure your business against losses stemming from an incident. Contact us at Midwest Insurance Group today to learn about all of our coverage and theft protection solutions.