Employee Dishonesty

What is Employee Dishonesty insurance?

Employee Dishonesty insurance covers you for losses due to fraud or theft by your employees, or anyone else colluding with an employee. Most insurance companies call it Fidelity Guarantee, but we think that Employee Dishonesty is easier to understand.

How will Employee Dishonesty insurance protect my business?

Your insurance policy will have its own specific list of insured events and exclusions. It is best to check with your insurer or the policy wording to confirm the details of your Employee Dishonesty insurance policy.

Some commonly covered and not covered items include:

What is usually not included? 

• Losses discovered more than 24 months after the event occurred
• Losses resulting from an employee who the business knew was dishonest
• Consequential loss
• Losses resulting from a principal, director or member of the business unless they are also an employee
• Acquired companies or other legal entities
• Events caused by uninsured shareholders

Could this happen to my business?

Theft claims

• An employee stole money out of the till, petty cash box and safe.
• Employees took business merchandise for their own personal use.

Fraud

• A salesperson sold the employer’s merchandise and services but told customers to make payment into the employee’s personal bank account.

Computer Fraud

• An IT employee temporarily changed the account details of several clients to the employee’s own account details – redirecting multiple small payments that should have been paid out to clients over a period of 12 months

Factors affecting your premium

Generally, the higher the level of risk that your business is exposed to, the higher the cost of the premium.

• Number of employees: the more employees you cover, the higher your premium will be.
• Occupation type: some occupations generally have easier access to company assets, which make them a higher risk for fraud and theft.
• Risk management policies in place: some insurers will not cover you if you do not reconcile payroll to staff lists, monitor payments to suppliers and maintain annual stock counts.