Employee Dishonesty: What are the Risks & is it Covered by Insurance?

employee dishonesty insurance coverage

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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.

Flood Insurance: Is Your Organization Covered?

flood insurance for nonprofits and social services organizations

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With the wake of Superstorm Sandy still fresh in our minds, we’re all thankful that no tropical storms or hurricanes have made landfall in New England so far this season. Last year’s storm was a reminder of the sad fact that about 40 percent of businesses are never able to fully recover after a flood.

Why are so many forced to permanently close their doors following a flood? The answer is simple – most commercial property insurance policies exclude flood coverage, and unfortunately, many policy holders are unaware of this. And in other cases, the thought of flood protection may not even cross one’s mind simply because the property isn’t within a designated flood zone. But as FEMA reminds us, flood waters move quickly and can stretch for miles, causing much devastation and creating a risk for everyone.

If you have yet to do so, now is as good a time as any to go ahead and incorporate flood insurance into your business or organization’s risk management plan. Flood insurance can offer valuable protection for businesses and organizations by covering the following:

– The insured building and its foundation
– Electrical and plumbing systems
– Heating and air equipment
– Appliances such as stoves and refrigerators
– Water heaters
– Permanently installed paneling, bookcases, etc.
– Permanently installed carpeting (over an unfinished floor)
– Debris removal
– Window blinds

Other items included under a commercial flood insurance policy can include personal property such as electronics, portable air conditioning units, and valuables such as original artwork. It’s important to note that flood insurance typically doesn’t cover items such as currency, property and belongings outside of the building, financial loss due to business interruption, and moisture damage that could have been avoided. Add-ons, however, can often be including in your insurance policy to cover these and other special items.

Without flood insurance, would your organization or business be able to recover quickly and get back to providing the services your community depends on? Would your organization be able to reopen in a timely manner without suffering a tremendous financial loss? If you would rather be able to answer these questions with confidence, contact the professionals at Lamb Financial Group today and let us assist you in making sure your organization or business is protected from flooding and other disasters. Call us for more information at 1-866-481-5262 or request a quote online today.

Common Business Insurance Myths and Why You Shouldn’t Fall for Them

Often times, business owners have to consider ways to cut costs, but if you’re thinking about foregoing certain forms of business insurance think again. There are many myths floating around about business insurance that owners fall for everyday, increasing their overall risks tremendously.

So what are the business insurance myths you should be aware of and avoid? Let’s take a look at some of the most common myths running the rumor mill.

business insurance

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My Business is Too Small to Need Insurance – If you don’t have a business insurance policy and face an accident, injury, or even a loss of life directly related to your business’ operations, you will most likely “bear the brunt” and be responsible for any associated costs. For a small business owner, this could mean losing your business and having to pay from personal funds. Just because your business is small doesn’t mean it’s at risk.

Workers’ Compensation Isn’t Necessary if You’re the Only EmployeeSome states, including New York, require all businesses to carry workers’ compensation even if an owner is the sole proprietor. In other states, workers’ compensation requirements will depend on the number of people you employ, the type of work your business does, and a worker’s classification (temporary vs. full or part-time).

We’ll Never be Sued Any business and any person can be sued, no matter the size of your business or how well it is or isn’t doing from a financial standpoint. Additionally, simply shutting down your business and ceasing operations won’t protect you from a lawsuit. “In a worst-case scenario, you could be required to cover settlements or judgments from your personal assets.”

Our Business is a Safe Business – And just because your business doesn’t pose a risk of exposing employees to hazardous materials or an infectious disease doesn’t mean you don’t need insurance. Even if your line of business isn’t considered “risky” you do need insurance in the event of a random accident in which an employee is injured or one in which your organization is held liable for damages.

Do you need to update your business insurance or adjust coverages? Contact Lamb Financial Group. We are an insurance broker offering insurance options for a range of businesses such as human and social services organizations. Visit our website for more information or to request a quote.