Protecting Your Small Business From Employee Crime

Author : Art Gib

Employee crime accounts for over $100 billion in losses to America’s economy each and every year In times of economic hardship such as those we are currently experiencing, the numbers start soaring What can small businesses do to protect themselves? A small business owner must use specific strategies to help keep losses to a minimum, and it’s also a good idea to add an employee crime rider to your business insurance plan

A new small business owner should know that most of the 1-2% of its annual sales loss due to crime is perpetrated from the inside These crimes can be divided into blue- collar and white- collar categories, depending on the nature of the theft

Blue-collar crimes include, but are not limited to: taking office supplies, falsifying time cards, voiding sales and then pocketing the money, and stealing inventory for the purposes of reselling This last item listed is particularly rampant in small businesses that use large warehouses for storage

White-collar crimes are most often computer related: they are therefore extremely difficult to detect and prevent because the theft involves altering information rather than stealing physical goods Employees may be falsifying documents in order to embezzle funds or may even be running their own businesses on company time using company equipment

Here are some ways to help prevent and detect employee crime:

– Set a proper example from management on down A business that fosters a culture of ethics and honesty naturally encourages that same type of behavior in all of its employees

– Create an internal control system: in the case of a business that employees a cash register or POS system, make sure that two people are supervising the area at all times and that no single person counts up the cash at the end of the day: accounting rules should be extremely strict Require signatures when employees requisition items Change locks on doors on a regular basis and change access passwords to computers frequently

– Have an internal audit system in place and also hire someone from the outside to conduct periodic audits Traceable theft is much more likely to be caught in this manner, and the culprits can be discharged

– When an employee criminal is caught, make his or her dismissal public knowledge so that your prompt reaction to any kind of theft or fraud will act as a deterrent to future crime

– Use the new technologies to your advantage: installing surveillance cameras not only deters customer crime, but it also makes employees think twice about their own actions

These are just a few of the many ways that small business owners can deal with employee crime However, if you anticipate that it might be a problem for your company, you may want to consider adding a “business crime” option to your business insurance policy Crime insurance may alleviate losses due to employee fraud and theft

If you are interested in adding an employee crime option to your New York small business insurance policy, or if you need New York auto insurance quotes, contact Community Brokerage. Art Gib is a freelance writer.

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