60 WWW.AGRM.ORG MAY/JUNE 2018 DAY-TO-DAY C ases of employee dis- honesty range from the small to the large but are always shocking. Recently, my local newspaper carried an article about a woman who stole more than $27,000 from her former employer and covered up the thefts by altering finan- cial records. She faces one count of third-degree grand larceny and nine counts of falsifying business records—all felonies. Her thieving occurred over nine months and seemingly didn’t raise suspicion during that time. Another case, earlier this month, involved an employee who was recently convicted of grand larceny and multiple counts of criminal tax fraud. She forged and cashed more than 1,000 checks over seven years, totaling $786,000. As a result, her employer was forced out of business. It is hard to be suspicious of our employees, especially those who have been with our organ- ization for many years. How could they do such a thing? Sometimes theft is motivated by tough times in their own lives, or loss of health and the resulting medical bills. Some- times it’s due to gambling debts or other addictive behavior that takes a lot of money to maintain. Regardless of the motivation, this is not a crime that only happens to “other people.” Even faith-based organizations run by Christians are susceptible to employee theft exposures. It is important to note that even if you have theft coverage under your insurance policy, employee theft requires a spe- cial, separate coverage and is purchased with its own limit. Some organizations put fidelity bonds in place for their treas- urer or others in positions of particular vulnerability. I would counsel that this ought to be broadened to include all employees. Additionally, there is a difference between the insurance that applies only to employee dishonesty versus employee theft. The former requires that your administra- tion must prove that the stealing employee knew that their actions were detrimental to your organization. Under the broadened employee theft insurance form, all that needs to be proven is that the employee has stolen, regardless of whether they knew it would cause harm or not. Additionally, employee theft insurance is superior to a fidelity bond insofar as the insurance company will not require you to prosecute the employee. Bonding seeks to always reimburse the bonding (insurance) company, and this may bring unwanted publicity to your organization. Insurance coverage will allow you to receive reimbursement for the stolen money, or the value of the stolen property, while leaving it up to the insurance company to decide if they want to prosecute the thieving employee. Ĩ Employee Dishonesty How your mission can make sure it is protected if an employee becomes a thief INSURANCE SOLUTIONS Brian H. Merriam Brian is the official insurance consultant for AGRM. The Merriam Agency offers prop- erty, casualty, auto, directors and officers, and workers’ com- pensation coverages tailored to the needs of AGRM members. You can email Brian at brian@merriaminsurance.com.