As a nonprofit or social service organization, any financial loss can be detrimental to your cause and hinder progress. It can be particularly difficult when the loss is due to employee dishonesty, since the money would likely be spent before it can be recovered. Unless your organization has specific coverage, employee dishonesty is not insured. A typical commercial insurance policy may cover litigation costs but not the actual monetary loss.
Despite careful screening, a dishonest employee may be inadvertently hired and your nonprofit or social service agency could be vulnerable to theft. Let’s look at a couple of scenarios. Your business accepts cash for transactions, and a dishonest employee takes money from the cash drawer or falsifies a transaction to make a profit. Another possible scenario could be if an employee offers discounts on merchandise to his or her friends, significantly harming your bottom line.
Unless your current policy specifically states coverage for crime-related losses, you will need to purchase another policy to supplement your commercial insurance. To protect your organization from losses due to employee theft, you can obtain a Fidelity Bond, also known as an “Employee Dishonesty Bond.” A Fidelity Bond protects your organization against theft and acts of fraud or forgery committed by a person employed by your organization. This includes check forgery, computer fraud and credit card fraud. Since the coverage is specifically a crime protection insurance, employees with a felony conviction will not likely be covered under a Fidelity policy.
Lamb Financial Group is an insurance broker that specializes in nonprofit risk management services. We invite you to call us at 866-481-5262 or use the form on our website to contact us for additional information or with any questions regarding insurance for nonprofits and social services. If you would like a quote, please fill out our online form and we will be happy to provide one.