Employee Fraud: How to be protected

Reasons for Rising Employee Dishonesty

Unfortunately, it has been reported that losses to business due to employee dishonesty has been rising in recent years.

There can be many reasons why an employee may be dishonest, and it is always a good idea to take stock of how your amateur sports club or social club operates currently to avoid and prevent this from happening.

Morale is almost always a factor, as a happy, contented employee is less to feel that the business owes them anything, and so is less likely to steal. A lack of supervision due to job cuts, or the risk of job cuts themselves have also been cited as possible factors. Other causes such as failing to have more stringent processes (especially when dealing with money) are also important in combating losses suffered due to employee dishonesty.

When it does happen however, there are certain criteria that will have been required to meet if you wish to claim for this kind of fraud. It is worth noting that this list is not exhaustive and is merely a guideline to the kinds of areas you should keep in mind when protecting yourself from this problem.

What Conditions Exist?

The following are just some of the conditions you must be following to assist with a successful claim against an employee dishonestly claim:

Annual Holiday Entitlement
Every employee who will be responsible for money, goods, accounts, computer operations or computer programming are required to take an uninterrupted holiday of at least two weeks in each calendar year. In this time they cannot perform any work duties and are required to stay away from their place of work.

Cash and Petty Cash
Cash in hand and petty cash must be checked independently of the employees responsible at least monthly and without warning every six months.

Cash Receipts
Employees receiving cash and cheques in the course of their duties shall be required to remit all monies received and/or bank in full on the day of receipt or next banking day unless otherwise agreed with the company.

Independently of the usual employees responsible for them, bank statements, receipts and counterfoils and supporting documents must be checked at least monthly against the cash book entries and the balance tested with cash and unpresented cheques.

Your policy will typically require that you obtain a reference before engaging any employee. If this reference is obtained verbally, you should produce and keep a written record of who you spoke to and when. Please refer to relevant section of your individual policy to clarify your specific obligations on this and any other conditions.

Contact your insurance broker
It is therefore vital that you check your own specific wording to ensure that you are complying with the conditions that apply to your policy.

To contact us about more information on claiming for employee dishonesty or to arrange a bespoke insurance policy for you business, telephone us on 0344 488 9204 or use our contact form.