In recent news, former bookkeeper Colleen Dhuga, of Kelowna, BC, pleaded guilty to stealing $1.2 million from her Calgary employer over a six-year period, claiming that her gambling addiction was to blame when she was confronted by her employer. Dhuga admitted to forging hundreds of cheques and stealing from multiple company credit cards. She attempted to cover up these crimes by telling the companies’ receptionist not to open any mail that came from the bank. The thefts first came to light when the companies’ bank noted unusual activity coming from the accounts. Dhuga is now facing charges of theft, fraud and money laundering and will be sentenced in June.
Although this case is notable for being over $1,000,000, employee theft of funds or inventory is a serious risk for many businesses. While a company may assume that they are covered for an employee’s internal theft under their standard business insurance policy, this is not always the case. Employee dishonesty insurance protects you from financial loss due to employee theft of money, securities, or property. The limits for this are separate from your standard business property insurance package, and should be reviewed on a regular basis.
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It is also important for company owners to regularly review and audit their businesses. For the Dhuga case, a basic audit would have quickly uncovered the losses and stopped it long before the six-year mark. This would have helped the employer minimize the loss to the company.
The vast majority of funds and inventory stolen by employees is never recovered, as the funds are often spent quickly on travel, gambling or hobbies, leaving little in the way of recoverable assets for the company or insurer. As a result, having the right level of Dishonesty Insurance is the key factor in allowing a company to properly protect themselves from these types of losses.
To discuss your current coverage or to find out how Fuse Insurance can help you, talk to one of our expert brokers.
Fuse Insurance Ltd. is the evolution of the commercial insurance brokerage, and the first of its kind in Western Canada. Backed by policies from a selection of A-rated insurers, Fuse Insurance can provide coverage for businesses large and small from almost any industry. For further information or to get an online quote now, click here or call us at 1-866-387-FUSE (3873) for more details.