Embezzlement

What Does Embezzlement Mean?

Embezzlement is a financial crime that can be committed by an individual or a group collaborating to execute the offense. It involves either outright theft or irresponsible and malicious behavior in a fiduciary role.

Insuranceopedia Explains Embezzlement

Embezzlement often occurs in the workplace, and when it happens on a large scale, it can jeopardize the entire business. Retrieving embezzled funds can be a lengthy process in court, and litigation can be expensive. However, there are business insurance policies designed to protect companies that fall victim to embezzlement. The specific type of coverage for these losses is commercial crime insurance, which pays for employee dishonesty and theft of money or securities. Some policies cover a portion of the lost funds, while others may reimburse the entire amount. Additionally, certain policies can assist businesses in their legal efforts to recover embezzled funds. Many companies also pair this coverage with internal controls and audits to reduce the risk of employee theft and fraud before it reaches a claim.