Employee dishonesty can happen anywhere and in any business. And even with the best HR managers and the most “foolproof” security systems, companies are never entirely safe from employee theft, bribery, embezzlement, and other types of occupational fraud.
So what, then, should business owners do? There’s no one-size-fits-all answer to this question, but implementing a combination of the following steps can assist businesses, especially small businesses, in promptly addressing dishonesty in the workplace.
Get a Comprehensive Commercial Insurance Policy
Commercial insurance not only protects against natural disasters, workplace accidents, and third-party claims, but it also includes coverage for crime and employee dishonesty.
How Commercial Insurance Works
Once your insurance provider determines your coverage needs, you can purchase employee dishonesty insurance coverage as part of your commercial insurance package. The premium amount is determined based on factors such as the size of your business, the extent of coverage, and the level of risk associated with employee dishonesty in your industry.
If dishonesty occurs, you must report it to your insurance provider promptly. The process typically involves notifying them of the incident and providing any necessary documentation or evidence to support your claim. The insurance provider will determine the claim’s validity according to the terms and conditions outlined in your policy.
Once the insurance provider verifies the claim, they will compensate you for the covered losses up to the policy limits.
Gather the Evidence
When dealing with employee dishonesty, you need solid proof before taking action. Don’t rely on another employee’s words, even if you trust them more. If you punish an employee without evidence, it could land your company in expensive legal trouble. So, gather proof legally, respect privacy laws in your state, and follow the privacy regulations outlined in your workplace handbook.
When in doubt, it’s always best to consult with an attorney.
Understand the Reasons Behind the Dishonest Behavior
When dealing with dishonest behavior, getting to the root of the problem is essential. For example, the employee might be under a lot of work-related stress. Or perhaps they believed that the company’s ethical standards weren’t strict enough, leading them to engage in false advertising or other dishonest practices.
Sometimes, fraudulent behavior can also stem from a lack of skills or competencies. In those cases, offering additional training opportunities can make a difference. Equipping employees with the proper knowledge and tools allows them to improve and avoid resorting to dishonest actions to cover up their shortcomings.
Suppose the behavior puts the company’s reputation, finances, or the safety of employees at risk. In that case, you may need to take stricter measures like termination or legal action to protect the company’s interests.
Take Steps to Protect Against Crime and Employee Dishonesty
While there is no foolproof solution to prevent employee dishonesty entirely, a combination of these steps can significantly reduce the risks and mitigate the impact of such incidents. By taking proactive measures, business owners can foster a culture of integrity, protect their company’s assets, and maintain trust with employees, customers, and stakeholders.
About RBC Insurance Associates
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