What Employers Need to Know about Employee Theft Protection

Many business owners are aware that employee theft numbers are rising. However, the statistics are much more alarming than most think. The Chamber of Commerce reported that $50 billion was spent annually because of fraud and theft committed by workers. They also reported about 20 percent of all businesses that fail do so because of internal fraud and theft. In a research report about loss prevention via internal methods, researchers said companies could lose between one and two percent of sales due to employees’ internal crimes.
Employers often wonder why their workers turn on them when these workers must rely on them for jobs and income. One of the reasons that employees behave this way may be that they feel overwhelmed with personal debts. For example, an employee with tremendous credit card debt who does not know how he or she will pay it may be more likely to try to steal or commit fraud. Credit card companies are also struggling to get past consumer debt and recently raised their required monthly payments. This practice will also help decrease total interest and help people pay off their debts faster, but many people are still unable to afford that extra amount. Since the new policy came behind rising interest rates and higher energy costs, it has hit consumers hard. Many people became vulnerable to payoff schemes and became anxious about their debts.
There are some employees who harbor grudges against employers due to premium increases for group health coverage. If their company is freezing pension plans, many employees will be outraged. When this feeling is compounded by the feeling of not being paid based on individual worth, the result is employees who are more than willing to steal or commit fraud. Some people may think their commercial property policies offer business protection from employee theft, but this is not the case. Commercial property insurance in general is written to cover most theft types. This includes inventory. Securities and cash are not considered property, so they are not included in covered items. For this reason, it is smart to buy an employee theft policy. This type of policy will cover money stolen outside or inside the premises of the business.
Under this type of policy, employee benefit plans may also be covered. Employers are required by the Employee Retirement Income Security Act to keep insurance equal to 10 percent of administered funds. The minimum ERISA amount required is $1,000, and the maximum required amount is $500,000. Employee theft policies may also include profit sharing plans, 401(k) plans, medical, dental, life, vision, pension plans and disability coverage. People who are in charge of administering employee benefit plans or welfare are required by ERISA to be bonded. Employee theft policies will satisfy requirements for this, but each plan must be connected to the insured name listed on a policy for coverage to be effective.

 

 

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