Is Your Small Business Vulnerable to Employee Theft?

Posted on: July 27, 2016 by titan-goodrich

To reduce risk, your first line of defense as a small business owner is to make sure you have a comprehensive Virginia Small Business Insurance policy. While insurance is a life-saver after an incident or disaster occurs, it cannot prevent unfortunate incidents – including dishonest employees stealing from your business.  You might be surprised by what statistics on the subject indicate. In light of this, it’s imperative that you consider this question: Is your small business vulnerable to employee theft?

Sobering Statistics

Many small business owners struggle to stay in business, much less turn a healthy profit. Theft is a huge reason why. Retail businesses are especially prone to theft. The University of Florida conducted a study that concluded retailers lose $44 billion annually. Almost half of those loses are due to shoplifting.

While you may not be surprised to learn that shoplifting is pervasive, you may be shocked to learn employee theft is equally problematic.  In 2013, Kessler International, which provides digital forensic and investigation services for businesses, conducted an anonymous survey of 500 employees of small businesses in various industries. The survey found the following pervasive patterns of employee theft:

  • More than 30% of employees admitted to being dishonest on their time records (stealing money via unearned compensation),
  • More than half admitted stealing office supplies and even toilet paper,
  • Nearly 20% admitted to stealing trade secrets including customer lists, marketing lists, and proprietary data, and
  • Approximately 35% admitted stealing goods or services from their employer.

When you consider fraud and embezzlement under the “employee theft” umbrella, the impact it can have on a small businesses is even more devastating.  Yet, you might still wondering, “Could this really happen to my small business?”  If you have employees, it absolutely can. Conduct background checks, check references, install security cameras, and above all else, trust your gut.

While you can reduce your risks by being aware of what your business is most prone to, it’s not possible to eliminate all risks – that’s why it’s imperative to seek proper coverage. Small business insurance may offset some theft losses.  To make sure your policy is as comprehensive as it needs to be, contact us at Goodrich & Watson for a no-obligation consultation.

Posted in: blog Business Insurance Commercial Insurance Retail Insurance Virginia

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