12 Sep Protection Against Business Theft

About The Author

Rochelle Gaglione – Commercial Risk Advisor 

With nearly 24 years at Gilbert’s, Rochelle has built strong client relationships through dedicated sales and account services. Her expertise in generating new business and delivering tailored solutions ensures each client’s unique needs are met.

Employee theft can be a major threat to any businesses, potentially causing significant loss and damage to a company’s reputation. As a business owner, eliminating threats by taking proactive measures to mitigate risks is the most important thing to do.

Understanding Theft Risks 

In any business where employees handle money or other assets, employee theft is always a risk. External theft, which is when someone outside the organization steals, is another concern.

Coverage Options

To protect a business from theft, several types of insurance can provide coverage, including: 

• Crime Insurance: Designed to cover losses caused by criminal activities like theft, burglary, embezzlement, and fraud. 
• Business Owners Policy: Combines general liability with property insurance, includes optional additions for crime and theft coverage. 
• Cyber Liability Insurance: Protects businesses from losses related to cybercrimes, including data breaches and online fraud.
• Commercial Property Insurance: Primarily covers physical damage to property, but some policies can include protection against theft and vandalism. 
• General Liability Insurance: Covers claims of bodily injury and property damage but may offer coverage related to theft issues. 

Preventing Employee Theft

Business insurance is a crucial tool in mitigating losses from theft. In addition to purchasing insurance coverage, there are several other ways to prevent theft, including: 

• Internal Controls & Audits: Implement strict financial controls, such as requiring dual signatures, segregating financial duties, reviewing bank accounts, and maintaining an authorized payee list. Conduct regular audits to ensure records align with transactions.
• Proper Bookkeeping & Cash Management: Maintain accurate financial records and use cash counters to monitor cash flow and detect counterfeit bills, ensuring discrepancies are addressed promptly.
• Technology & Surveillance: Use surveillance cameras and monitoring software to deter theft, fraud, and embezzlement. Additionally, leverage loss prevention analytics to track employee transactions and identify red flags.
• Security Guidelines & Policies: Establish clear policies that state theft will result in immediate termination, without warnings or second chances.
• Background Checks: Conduct thorough background checks on all potential employees to avoid hiring those with a history of theft or dishonesty.
• Employee Engagement & Reporting Systems: Foster a positive, supportive work culture where employees feel valued. Engaged employees are less likely to steal and more likely to report suspicious activities. Set up an anonymous reporting system to encourage employees to speak up without fear of retaliation.
• Training & Awareness: Regularly train staff on ethical conduct, the consequences of theft, and how to recognize warning signs of fraud.
• Active Leadership & Participation: Ensure business owners and managers stay involved in day-to-day operations to monitor customer transactions and address any mishandling of cash or products.

Preventing External Theft

• Physical Security: Install alarm systems, surveillance cameras, locks, and employee access cards to control public entry to the property. 
• Technology: Protect your data with firewalls, encryption, and other measures of cybersecurity. Use RFID tags and monitored POS systems to detect and prevent fraud transactions. 

Preventing theft, whether from within or outside your organization, demands a comprehensive strategy. By strengthening existing processes and introducing new preventive measures, you can significantly reduce the risk of theft and safeguard your business.

A thorough evaluation of your business risks is essential in selecting the right insurance policy. For instance, a business handling substantial cash flow might require crime coverage, while a company managing large amounts of online data should consider a cyber liability policy. Tailoring your insurance to address specific vulnerabilities ensures optimal protection against potential threats.

Summer travels are all about relaxation and adventure, but unexpected disruptions can happen no matter what. If you’re planning a summer getaway and want to ensure your vacation plans are protected, reach out to me or contact one of our talented Risk Advisors today!

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