Monday, March 05, 2018

Delaware Business Insurance Update from CNC Insurance Associates. " Employee Theft From Your Business Could Involve Some Tricks" 3-4-18

As a business owner you always run the risk of employee theft. Thank goodness most of it is small scale and rarely makes an impact on your bottom line. On ocassion however, a business owner can be victimized by a smart enterprising employee or employees. Let me give you some examples:

FAKE VENDOR SCAM- the trusted office bookkeeper set up a bogus vendor account for office supplies (address and all). The business owner authorizsed the paying of invoices from this bogus account for over 5 years. The owner did not realize the invoices were to a fake vendor account until it was too late. When the scam was finally figured out the total loss was close to $100,000 !!

THE ONE PIECE AT A TIME SCAM- the owner of a construction company would lose a few pieces of material every week at different jobsites. His crew were not doing a very good job keeping track of the inventory. Over the course of a few years this continued. Finally one of the employees ratted out the others and disclosed to the owner that the whole crew was in on it. They were slowly stealing materials to build a hunting lodge for the "boys". The total loss to the contractor was a whopping $80,000 !

How do you protect yourself ?  Here are some very simple risk management steps you can take to minimize employee theft
1) Make every employee take a vacation. If they are running an ongoing scam, they usually cannot go away from it for very long.
2) Use your accountant more in review and analysis of your financials. It will be worth the extra costs
3) Set up a culture of no tolerance when it comes to employee theft and communicate it frequently.
4) Buy Employee Dishonesty Insurance, this will give you the protection in case it happens to you.

It is tough to make a dollar in business today. With risk management and insurance, you can keep more of it by keeping your employees hands out of the "cookie jar". Until next time be careful out there and know yor risks.

G. Kevin Nemith  CNC Insurance Associates / Hilb Group
1-87-262-3276 toll free