Income Insurance as Protection from Employee Thefts

Mainly due to the poor economy, employee theft in businesses large and small has been on the rise in the last few years. One way that companies can help protect themselves against this type of cash loss is by obtaining income protection insurance.

How it Works

Employers can take out policies of income insurance solely for protection against the possibility of employee theft. This type of theft could be of low, medium or high priced products that the shop carries, or it can be theft and fraud involving stealing cash, checks, money orders paid to the business, or credit card transaction theft.

There's a certain percentage of employees in many industries who're simply dishonest and they feel they can get away with stealing a company's financial resources. They can work in the sales department or in bookkeeping and accounting functions. If they work on a cash register, this is one of the easiest ways for them to steal either cash or credit card identification information. Income insurance works like other forms of insurance in that it protects the insured against the total value of the financial loss incurred.

How it Deters Employee Theft

If employers make it known that they have extensive employee theft policy insurance in place, some workers may feel that the employer actually loses nothing if money is stolen because he gets reimbursed from his insurance company when making a claim. But this isn't so. He has to make his monthly or quarterly premiums to keep the income insurance in effect and he may even have a high deductible he has to pay first before the insurance company will pay out a theft claim, so it does indeed cost the employer a lot of money to keep such a policy in effect.

But most employees, when they find out about these policies in place, will be on guard and much more careful of even thinking about ever stealing any money from the company because they know they're under extreme suspicion if the policy was taken out in the first place. Overall, income insurance can be extremely effective for employers when theft incidents actually do occur, no mater what their amounts.