Some employees admit to stealing funds or property from their employers, causing financial losses. A report reveals that employee embezzlement causes businesses to lose approximately 5% of their annual revenue. Standard business insurance policies also do not cover employee theft and related incidents. Then, how can you protect your company assets from your employees? Read on to find out.
The median losses caused by employee theft or fraud are $125,000 to $140,000. Over 21% of such cases caused losses of nearly $1 million. The embezzlement schemes go on for 14-18 months before it is detected, and over half of the victimized companies have not recovered any of their embezzlement losses. Also, the 2018 Hiscox Embezzlement Study reveals that in 4 out of 5 fraud cases, more than one perpetrator is involved.
Here are some ways employees and vendors steal funds from an employer:
Embezzlers can be long-time workers of a company, and they can steal for many reasons ranging from disgruntlement with the company to their financial problems. The Hiscox report reveals that 33% of perpetrators work in the accounting/finance department, and 85% of embezzlement is committed by managers or higher officials. Nevertheless, embezzlement can happen in any company area and can be committed by any employee for any reason.
To prevent employee theft in your company, you must:
According to the Association of Certified Fraud Examiners (ACFE), 43% of occupational frauds are detected by tips. So, train your employees on preventing fraud and reporting suspicious activity to prevent occupational fraud. Also, taking severe legal action against embezzlers can help prevent future thefts.
If you take care of your employees and offer them what they deserve, they will not commit embezzlement. One such way is buying an employee benefits package. This package includes a wide range of benefits for your employees, including healthcare benefits, supplemental benefits, voluntary benefits, disability benefits, etc. So, you can protect them while providing effective solutions for their well-being and peace of mind.
At Knight Insurance Services, we offer a personalized employee benefits package with several advantages to help employers focus on their business while ensuring that their employees are well-taken care of. For over 100 years, we have been dedicated to meeting the unique requirements of our valued customers through our comprehensive insurance policies. Contact us today to learn more about our employee benefits package.