What Does Employee Dishonesty Mean?
Employee dishonesty is any fraudulent act committed by an employee or a group of employees and one that could potentially result in financial losses for a company. To protect its interest, a company may purchase a commercial crime policy or a standalone employee dishonesty insurance.
Employee dishonesty is also known as commercial dishonesty.
Insuranceopedia Explains Employee Dishonesty
According to the Association of Certified Fraud Examiners, about 6 percent of total revenues of companies or $400 billion per year are lost due to fraud and embezzlement. Common cases of employee dishonesty include theft, computer or fund transfer fraud, embezzlement, robbery, burglary, and forgery involving money, properties, or securities. Therefore, insurance policies exist to help companies shoulder the costs of such losses, which may be substantial and even crippling for small businesses.