Category Archives: Crime Coverage

Steps You Can Take to Protect Your Business from Employee Theft

An employee slips merchandise into her purse. Or maybe someone makes a company check out to himself, or pilfers supplies from the stock room. Even before you discover the crime, your business may have lost a bundle of money.

A 2016 poll on employee theft found that 80% of embezzlement happens at small businesses.

How Big an Issue Is Employee Theft?

According to our claims data, burglary or theft is the most common reason for small business insurance claims, accounting for 20% of all claims. In some cases, an employee turns out to be the culprit.

You can mitigate the risk and protect your company by making sure you have Crime Bond (Fidelity Bond) to cover losses due to employee theft. But understanding how and why employees steal may help you head off problems in the first place.

There are a variety of ways an employee can steal from a company. For example, workers can steal money, take home items of value, or snag your intellectual property.

Charles Read, an accountant, and CEO of the payroll company GetPayroll/Simon learned about employee theft the hard way when he first started his business. He discovered a receptionist was taking accounts receivable checks, whiting out the company name, writing in her own name, and cashing them at the bank. Read discovered the crime after his company sent a past-due notice to a client. “They sent us a copy of the check with her name on it,” he says. “That’s how we caught her.”

Steps You Can Take to Protect Your Business.

Fortunately, you might not have to go through a similar experience if you put basic security measures in place. BF Bond is here to help. Here are four steps to take to protect your company from sticky-fingered employees:

Screen new hires carefully.

Preventing employee stealing begins during the hiring process. Checking out an applicant thoroughly can save you headaches and money, and it’s crucial to follow employee screening laws in your state.

For example, you can and should check a job candidate’s social media profiles after you conduct a job interview. But only look at public content, and never ask for social media passwords, which can put you at risk of violating federal law, warns the Society for Human Resource Management. If you want to check a candidate’s personal credit, you’ll need to get permission in writing.

Pre-employment screening companies can do a background check for $50 to $200 per person, Springer says. Make sure you check references as well. Even big companies get burned by failing to find out why a candidate left a previous job. “Maybe they were fired for stealing,” he says.

Get employees to sign a computer policy.

When bringing a new employee on-board, ask him to sign a short document stating that the company computer is the property of the business and that you as the employer have a right to check it at any time, If you have a problem, you can go in and look at the computer after the employee leaves for the day,” he says.

Take steps to beef up security.

You should take several actions to reduce opportunities for employees to steal. For example:

Don’t give one employee too much control. For example, if one employee cuts checks, a different employee should sign them.

Get hands-on with finances. Put a policy in place that you personally must sign off on payments above a certain amount.

Keep a tight hold on the company credit card. Rather than getting employees their own cards, if an employee needs to make a purchase, hand them your card, get it back when they return from the store, and check your account soon after. If they need to travel, give them a cash advance and insist on getting receipts for every expenditure.

Lock down goods and checks. Lock up office supplies and, if you sell a physical product, keep strict merchandise controls in place. If you have company checks, keep them under lock and key no matter how much you trust your employees. A cautionary tale: One small business was shocked to discover that an employee they had raised like a daughter was using company checks to buy her groceries.

Employee theft often starts out small — for example, an employee who’s short of cash for lunch “borrows” $10 from the cash drawer to buy a sub and chips, and they pay it back later. Maybe the second or third time, they “forget” to replace the cash, and so on. The key is to remove the temptation as much as possible so they don’t get started.

Watch out for warning signs.

No matter how much you trust your employees, look for telltale red flags that could suggest something is wrong, Springer recommends. These tip-offs include: money problems, a disgruntled attitude, a lavish lifestyle that outpaces their paycheck, personal problems, excessive chumminess with customers or suppliers, and a reluctance to go on vacation or otherwise miss work. Of course, these signs don’t always signal stealing, but might mean that an employee merits closer scrutiny.

Acquire a Fidelity Bond from BFBond.com to protect your business interests.

These types of bonds are meant to avert serious financial damages and losses to companies in the event of any fraud, forgery, alteration or embezzlement.

BFBond.com Crime Bonds are valuable insurance tools for any business, especially those dealing with money.

Fidelity Bond Types.

Fidelity bonds represent a high level of flexibility. There are currently two major types available.

The first is known as a First Party Fidelity Bond, which, in essence, is to protect a company from its employees if they steal something of the company assets, or commit fraud.

A First Party Fidelity Bond will cover nearly all company damages arising due to financial crimes against a company or its customers.

The second main type is a Third Party Fidelity Bond, which protects businesses under similar circumstances. However, a Third Party Fidelity Bond offers ultimate coverage against most illegal acts such as fraud, scams, or other thefts committed by employees.

If theft happens, take action quickly to mitigate the damage and prevent further losses. If you suspect that an employee has stolen from you, you need to let your surety company know right away,  Inform them that you’re investigating the matter and will report back with details and documentation of how the theft occurred.

The protection offered by Fidelity Bonds is important because a stealing employee can rob a small business of thousands — or even tens or hundreds of thousands — of dollars that can make or break a small business.

Applying for a Fidelity Bond is not difficult, as we’ve simplified the process for you into easy to understand steps, which can be found on our Fidelity Bond application here. You can also call us at 800.921.1008, read more about Fidelity Bonds and live chat with us at BFBond.com.

 

Crime Bonds

The Importance of Crime Bonds.

Crime bonds protect against loss from dishonest employees

White-collar crime should be of great concern to business owners. It can be occurring now, right in front of us by people we trust. How many times have we read in newspapers of the kind old bookkeeper, polished senior executive, well-respected city manager, and other people we deal with day to day who are arrested for stealing from their employer or otherwise taking funds that did not belong to them.

 

The two major types of Fidelity bonds:

The first is known as a First Party Fidelity Bond, First-party fidelity bonds protect businesses against intentionally wrongful acts (fraud, theft, forgery, etc.) committed by employees of that business.

The second type is a Third Party Fidelity Bond, Third-party fidelity bonds protect businesses against intentionally wrongful acts committed by people working for them on a contract basis (e.g., consultants or independent contractors).

White collar crime can have serious financial consequences, even threatening a private company’s survival. Bernard Fleischer & Sons, Inc. offers a solution to handling crime losses such as dishonesty, forgery, robbery, safe burglary, computer fraud and other criminal acts committed by employees, leased employees, volunteers or someone required to be bonded under ERISA, through a Crime Insurance Policy.

For more information about Fidelity/Crime Bonds Click here, call 1.800.921.1008 or visit our website to get a free no obligation Fidelity/Crime Insurance quote.

Workplace Crime costs $50 Billion a year, protect your business with Fidelity Bonds.

There is a hidden risk facing small businesses across the country that often goes unnoticed until it suddenly rips through a firm’s finances: employee theft. It’s a crime that is costing U.S. businesses $50 billion annually, with 7% of annual revenues lost to theft or fraud according to Statistic Brain.

Studies found that U.S. businesses affected by employee theft lost an average of $1.13 million in 2016. Small and midsize businesses were hit disproportionately, representing 68 percent of the cases. Their median loss in 2016 was $289,864.

Despite the alarming levels of embezzlement taking place, it isn’t top of mind for many small-business owners.

When one hears the word “Bonds” it brings to mind an investment. But there are other types of bonds that have nothing to do with investing; they relate to business operations and function similarly to insurance.

Surety Bonds are like insurance. They back up a promise to do something; if the promise is breached, the bond pays off to complete the promise.

One common Surety Bond type is a Fidelity Bond (or Crime Bond). Fidelity bonds provide insurance against loss from employee misconduct, such as theft or embezzlement, which is not otherwise covered by a company’s regular insurance coverage. A bond can provide blanket coverage for the actions of all employees or can be tailored to cover one or more specific employees.

When safeguards like thorough employee screening and careful supervision aren’t enough, fidelity bond coverage to protect against employee theft is recommended. If one or more of your employees are entrusted to handle cash or other valuable assets, a Fidelity Bond can protect your business.

Coverage can include:

  • Employee theft – Stealing merchandise.
  • Forgery or Alteration – Checks, gift cards etc.
  • Theft of Money and Securities –  Registers etc.
  • Robbery of safe, burglary of other property, stones, bullion, etc.
  • Computer fraud, funds transfer, diverting funds to personal accounts.
  • Money orders and counterfeit money.
  • Theft from third parties, on loan, deliveries, on customer’s premises.

 

The cost of Fidelity Bonds: There is no fixed rate for bonds. There are many factors that impact cost, such as the extent of coverage, whether there is a deductible (if allowed), and the surety company that issues the bond. As a rule of thumb, a fidelity bond can cost about ½% to 1% of the coverage obtained.

Surety and fidelity bonds are a risk management tool, it is helpful to discuss your business requirements with an experienced, trusted agent like BFBond/Bernard Fleischer & Sons Inc. We can advise you what coverage is best for your business when traditional insurance doesn’t provide the protection you want or require.

Would a crime policy cover this?

Strange way of stealing Gold from the Royal Canadian Mint.

Via the Anus!

goldbullion1717128The case against Leston Lawrence, 35, in an Ottawa courtroom presided over by Justice Peter Doody on a number of smuggling-for-cash charges may seem like a joke, but the risk of employee dishonesty is all too real. Mr. Lawrence is accused of theft, laundering the proceeds of crime, possession of stolen property, breach of trust and he was fired from the Mint. Would a Fidelity Crime Bond cover this?

 
During testimony it was revealed that Mr. Lawrence set off the metal detectors more often than the other employees (Except for the ones with medical implants), requiring manual scans using a metal detecting wand but they never seemed to find anything on him. Investigators say that he used Vaseline and rubber gloves that they found in his work locker to aid in smuggling the cookie sized pucks of gold.

 
Four of the pucks were found in a safe deposit box owned by Lawrence and he had sold 18 of them for approximately $6,800 each from November 2014 to March 2015. Subsequently, an obviously dedicated security employee tested the idea that the pucks could be concealed in an anal cavity and not be detected by the wand.

 
Curiously, the mint never noticed any gold missing. After a bank teller noticed Mr. Lawrence had been cashing several checks from a gold dealer and then transferring the money out of the country is when the teller looked up the man’s place of work and alerted the mint to the suspicious activity.

 
Jaw dropping statistics from the ‘Statistic Brain’ website, trusted research provider for Forbes, CNN, ABC News, and many others reveals that the amount stolen annually from U.S. businesses by employees is $50,000,000,000 and 7% of annual revenues are lost to employee dishonesty and fraud.

 
Although a minority of employees becomes dishonest, they can rationalize their theft in many ways: ‘the company won’t miss it,’ ‘they’re not paying me enough,’ or the person succumbs to gambling or some other addiction. Protecting a business with a Fiduciary bond aka Crime bond or Fidelity bond is the most effective way of preventing these losses. The definition on a Travelers Insurance policy for Employee Theft reads

 

“The Company will pay the Insured for the Insured’s direct loss of, or direct loss from damage to
Money, Securities and Other Property directly caused by Theft or Forgery committed by an
Employee, whether identified or not, acting alone or in collusion with other persons”

 

In addition to the employer being protected from covered losses due to theft and forgery, the exact definition of “who” is covered is defined in the policy, but should include all current or former employees, partners, members, directors, volunteers, trustees, seasonal employees and temporary employees. If the mint had one of these bond policies they would be insured against the conservatively estimated $180,000.00 loss.

 
Some of the typical exclusions to these policies are accounting or math errors, vandalism, Governmental action, restatement of a profit and loss statement and theft by the employer itself. You cannot steal from yourself; however coverage extends to partners, directors, members, and trustees.

 
To learn more about fiduciary bond products or any other types of bonds visit our website at www.bfbond.com, our blog at www.bfbond.com/blog , call us at 800.921.1008, email jward@bfbond.com with your inquiries or download the application here.

 

 

In a former Swing State $5.5M embezzlement case, does your crime bond cover this?

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An Indianapolis woman will learn her fate after admitting to six counts of wire fraud and money laundering in a $5.5 million embezzlement scheme.

No longer a swing state (The state typically votes Republican with an exception in 2008) Hoosiers will head to the polls as Kristi Espiritu will be headed to sentencing in U.S. District Court at 10 a.m. on Nov. 8. She worked at Network Storage Inc., a data storage company based in Indianapolis, from 2008 to 2014 as a bookkeeper.

Court records show that with access to the company’s bank accounts she used their money to pay for shopping trips to purchase luxury items such as diamonds, handbags, electronics, furnishings and travel. A common occurrence in employee theft losses. According to a plea agreement reached back in May she admitted to lying to company executives and falsifying books and payroll systems. Even the best managers,  can be over trusting and never spot check or have a system to verify the monies in their bank account to avoid crimes like this.

As a part of a plea deal she agreed to pay $5.5 million in restitution, if she can’t pay that amount before sentencing, federal officials will use asset forfeiture to recover the funds. If the company purchased a dishonesty bond to cover this crime, they would become whole and not be concerned if the employee had the monies to repay the theft.

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Espiritu could face up to 20 years in prison and a $250,000 fine on four wire fraud charges, and 10 years in prison and a $250,000 fine on two money laundering charges. White collar criminals steal through position and influence and quite often get away with their crimes for many years before getting caught.

It is unsure whether Network Storage Inc. had a fidelity bond (aka Crime Bond, Dishonesty Bond) which is a form of insurance protection that covers losses incurred as a result of fraudulent acts by specified individuals, usually insuring a business for losses caused by dishonest acts of its employees. Learn how fidelity bonds and surety bonds from BF Bond provide your growing business with the protection you require. Visit us at BFBond.com to fill out an application or call us at 800.921.1008

 

Dishonesty Bonds for Art Galleries

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In a scene from the 1937 movie “Good Morning Boys,” Mark Daly and Lilli Palmer swap the real Mona Lisa for a copy. Hulton Archive/Getty Images

Recently I had been interviewed by the Wall Street Journal. The topic was Mysterious Disappearance of art work in a gallery. The reporter was investigating if a standard Art Gallery/ Art Dealer Insurance policy would cover this. I delved into the policy form and began to realize there was no coverage for mysterious disappearance and work stolen by employees.
I do recall a story of a Gallery, that gave a print to an employee to deliver a few blocks away. Neither the trusted employee nor the print ever arrived to the destination. When the gallerist looked to his insurance policy for coverage, all he found was the exclusion, hence not covered for this type of loss, the same exclusion was found in the collector’s policy. It cost the Gallery 100’s of thousands of dollars, which he had to pay to the collector. Employee Dishonesty Bond is the correct form to protect from these types of losses.
As I ponder more about this subject, I realize the Art world, conveys millions of dollars without properly risk managing employee dishonesty. It may be the bookkeeper who is wiring money to a fake account, writing forged checks, or the salesperson selling off inventory, unbeknownst to the owner. The exposure is real, buy a Bond.
Collectors should start asking to see if the person handling the Art has a fiduciary policy. This protects the collector from misappropriation of funds earmarked for purchase in his behalf. Lawyers cannot touch the escrow accounts; Insurance agents have trust accounts for policy premiums, but for Art dealers there are no laws just pure exposure to you losing all.

Follow the link to the Crime bond application and make sure to ask for the loss of stock, forgery and other crimes by the employees.

 

William Fleischer CIC

Bernard Fleischer & Sons / BF Bond / Art Insurance Now

 

I Trust My Employees, I Don’t Need Crime Insurance.

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Trust and morals are  a core element of any type of relationship—business or friendship. And no one hires, at least knowingly, a dishonest employee. Sometimes people change, however. Employees can become dishonest, albeit only a minority of them do. Employees can rationalize their theft in many ways: ‘the company won’t miss it,’ ‘they’re not paying me enough,’ or the person succumbs to a gambling or some other addiction.

Unfortunately businesses do go bankrupt because their employees’ steal large amounts of money, or smaller amounts over a period of years, or in some other way commit computer fraud or some other type of fraud. This has an impact not only on your business but also on your other employees and those who count on your services or products.

To learn more about commercial crime insurance and how to protect your business, visit us at www.BF Bond.com. We’ll work with you to:

  • Assess the risk potential for external or internal criminal actions
  • Determine the precise insurance coverage you need for your business
  • Click here to learn more about Crime/Fidelity Bonds

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Typical Fidelity/Crime Insurance coverage highlights include:

Typical Fidelity/Crime Insurance coverage highlights include:

Comprehensive coverage for:

  • Employee theft
  • Money and securities while on premises or in transit
  • Forgery
  • Funds transfer fraud
  • Computer fraud
  • Money order and counterfeit currency fraud
  • Credit card fraud
  • Optional client coverage
  • Coverage for investigative costs for covered losses
  • Responds to Employee Retirement Income Security Act of 1974 (ERISA) plan bonding requirement.
  • Broad definition of employee, including directors and officers; employees, including part-time, leased, temporary, and seasonal employees; and volunteers.
  • Worldwide coverage.

Complete the EZ application for a quick quote

 

Why do I need Fidelity/Crime Insurance?

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Why do I need Fidelity/Crime Insurance?

Fraud and embezzlement in the workplace is on the rise, occurring in even the finest work environments.

  • 82% of workplace crime is carried out by employees
  • 1 in 4 employees has either committed or witnessed workplace fraud and abuse
  • 1 in 4 employees committing fraud against their employer has been with the company for more than 10 years
  • Only 1 in 3 of those who have witnessed a workplace crime bother to report it

These crimes can go on for years and when discovered the impact can be huge. Smaller companies are especially vulnerable to Fidelity crimes because the trust factor is increased due to the closeness of the employees.

Most business insurance policies either exclude or provide only nominal amounts of coverage for loss of money and securities as well as employee dishonesty exposures.

Employee dishonesty causes as much as 20% of the nation’s business failures.

White collar crime can have serious financial consequences, even threatening a private company’s survival. Bernard Fleischer & Sons, Inc. offers a solution to handling crime losses such as dishonesty, forgery, robbery, safe burglary, computer fraud and other criminal acts committed by employees, leased employees, volunteers or someone required to be bonded under ERISA, through a Crime Insurance Policy. For more information about Fidelity/Crime Bonds call 1.800.921.1008 or visit our website to get a free no obligation Fidelity/Crime Insurance quote.

Overview of crime coverages

 

Today’s business environment is constantly evolving, and executive liability and crime exposures are rapidly changing
right along with it. Making sure your client’s insurance coverage is keeping pace is now even easier with the new
enhancements:
Multitude of coverages to suit every need
Below are some of the highlights of coverages
Loss from forgery or alteration of covered

instruments (including business credit card
instruments)
• Loss of money, securities and other property
on your premises or banking premises
• Loss of money, securities and other property
while in transit
• Loss from acceptance of unpaid money orders
and counterfeit money (including coins and
travelers checks)
• Loss from computer crime (including computer

Fidelity
Includes coverage for employee theft, ERISA fidelity and
employee theft of client property for direct loss of, or
direct loss from damage to money, securities and other
property.
Claim example:
An employee leveraged her role as
executive director to procure payment to fraudulent
vendors and to procure gift cards and other goods for
personal benefit.
Forgery or Alteration
Includes coverage for loss sustained through forgery or
alteration of outgoing negotiable instruments made or
drawn by you, or drawn on your account(s), or made or
drawn by one acting as your agent.
Claim example:
A signature of another person was
fraudulently signed on a check and cashed at the
insured’s bank . An affidavit
of forgery was executed claiming that the person’s
signature that appears on the check was not placed on
the check by that person.
On Premises
Includes coverage for direct loss from damage, money or
securities located inside the premises directly caused by
theft, robbery or safe burglary.
Claim example:
Rent checks from eight different
residents were stolen from inside the insured’s
premises. Loss was discovered after notices were sent
out to residents advising that payments were overdue
and one of the residents advised that his check had
already been cashed.
In Transit
Includes coverage for direct loss of money or securities
directly caused by theft, disappearance, damage or
destruction while in transit outside the insured’s
premises and in the care and custody of a messenger or
armored vehicle company.
Claim example:
A company lost money was stolen from its messenger’s
truck while in transit.
Money Orders and Counterfeit Money
Includes coverage for direct loss caused by the insured’s
good faith acceptance of worthless money orders or
counterfeit money.
Claim example:
A company received a counterfeit
cashier’s check for payment of delivered equipment.