Business owners don't typically believe employee dishonesty will happen in their business. However, employee fraud is more common than you think. Did you realize $3 Billion dollars of business profits are lost annually due to employee fraud?
Here’s an example of an employee fraud case from 2008 that could have been covered had Motorola had an Employee Fidelity policy in place:
One might assume that supervisors at Motorola would notice that one employee was ordering an awful lot of inkjet cartridges and getting reimbursed for a ridiculous amount of purchases for the company. But it would be a bad assumption.
For three years beginning in December 2003, Bethann Gilroy, 33, got away with a four-pronged theft scheme that defrauded Motorola of $860,000, according to her recent plea agreement. In 2008, she was sentenced to 33 months behind bars, despite her attorney's arguments that her mail fraud guilty plea should result only in probation. Her lawyer failed to return a call seeking comment.
According to court records, Ms. Gilroy was part of Motorola's inventory repair team in Elgin, Ill. Basically this means she ordered repair parts for computers and printers and other stuff that constantly breaks down.
In her plea agreement, Ms. Gilroy admitted to ordering more than $500,000 worth of inkjet cartridges that Motorola really didn't need and then selling them on eBay with the help of an unnamed relative. She also admitted to pocketing more than $333,000 in reimbursements for fictional purchases by somehow creating fake invoices and bogus credit card statements that her supervisor approved.
Still more: She also stole various technology accessories worth roughly $4,500 and sold them on eBay, and used almost $7,000 of Motorola's money to fund computer hardware for herself.
So how did she get away with it? Well, prosecutors say she was a trusted employee - which presumably meant her supervisor failed to closely examine invoices and expense reports. Chances are that's one supervisor who will never make that mistake again.
It’s safe to assume that the limits of liability found in the Firm's package policy for Employee Dishonesty will not be enough to cover this loss. A Separate Fidelity policy with a $1,000,000 Limit of Liability would only typically cost between $1K and $3K annually, depending on the size of the firm.
Give us a call at (800)432-8431 to discuss how you can easily obtain a separate Employee Fidelity policy to protect your business against employee dishonesty and fraud.