Protect Your Practice and Your Income

employee theft1One of the unfortunate effects of the economy’s recent struggles has been an increase in employee theft. Even an office with careful systems in place can fall prey to a dishonest employee. This is why we recommend that physicians, attorneys, and small-business owners purchase Employee Theft coverage, insurance for financial losses suffered as a direct result of employee theft.

Professionals such as physicians and attorneys are not immune from embezzlement. In fact, physicians and attorneys tend to be so busy caring for patients and working on client matters that they may be particularly vulnerable to employee theft. Many of our physician customers have joined larger groups, where individual physicians become removed from the accounting functions of the office, creating opportunity for dishonesty. This coverage is also critical for professionals who practice individually or in a smaller setting, as it can be more difficult for a small business to absorb theft losses.

employee theftSeveral affordable coverage options are available. Most professionals’ offices have a Business Owners’ Policy (“BOP”) in place that provides protection for general liability (e.g., a slip-and-fall in the parking lot) and for losses to property (e.g., a building fire). This policy may include some Employee Theft coverage but it is likely to be a small amount. Employee Theft coverage can be added with a stand-alone Crime Policy, which can provide coverage for other, non-employee crime losses as well.

In deciding how much employee theft coverage you should have, remember that theft can go undetected for a long time, resulting in significant losses. If you don’t have coverage, or enough coverage, please contact us to review the cost-effective protection we offer.

(Information provided is a summary only. For complete terms and limitations, please refer to the applicable Certificate or Policy of Insurance. Specimen copies available upon request.)



Work with your accountant to establish internal controls, such as establishing an authorized payee list to detect payments to fictitious payees and segregating financial duties among employees. For example, the employee who reconciles bank accounts should not also be responsible for making deposits or have access to check-signing plates.

For large checks, require dual signatures, and for particularly large checks, require that they be personally signed by you and that proper supporting documentation be shown to you. Put corresponding checks and balances into place with respect to electronic transfers.

  • Screen new employees thoroughly to eliminate problem applicants. Check references and previous employment.
  • Involve a Certified Public Accountant in your financial reporting.
  • Personally review bank accounts on a regular basis for irregular activity.
  • Rotate mail-opening duties, and spot-check the incoming mail yourself.
  • Train your employees on workplace ethics and fraud prevention.
  • Carefully monitor any financial functions assigned to an employee if you know that employee is experiencing severe financial difficulty.

Even if you’re following the above tips, you can still have a claim. That is why we encourage you to purchase this coverage.