Restoration Insurance Tip: Employee Dishonesty

As the economy continues to putter along, we are continually hearing stories about employees committing desperate acts against their restoration-company employers and even their customers.

Within the past year, we have seen the following scenarios happen to some of our clients: An employee stole inventory from his company and disappeared. Another employee used the company credit card for personal purchases, including a television, gas, and clothes. And yet another employee skimmed money from the company for over 12 months amounting to a total loss of about $20,000.

The question we often get is on the possibility of purchasing insurance to cover these types of acts. There is insurance coverage available for these situations, and it is found in the employee dishonesty portion of a crime policy.

Employee dishonesty insurance is coverage for just that: dishonest or criminal acts committed by employees. It covers losses where an employee steals money, securities or even tangible property. Some policies will even cover theft of clients’ belongings.

What is the typical limit? It depends. Restoration contractors tend to be less cash heavy than many other companies. With that in mind, a typical limit is anywhere from $50,000 to $100,000 in coverage.

How much will this cost? Depending upon the limit and type of business, premium starts at a couple hundred dollars a year. Premium is almost always based upon the number of employees within the company.

Any exclusions?

Acts committed by an owner, officer, or director within the company.
Inventory shortages where the sloe proof of loss is an inventory computation.
Any employee that is discovered to have a history of prior dishonest acts either before or after being employed by the insured.

If you are interested in receiving a quote on a crime insurance policy, please feel free to give our office a call.