Employee Theft

Insurance coverage for the theft of your property or third party property

As an employer, you want to trust the people who work for you. Unfortunately, it’s impossible to know everything that is going on in the personal lives of your employees. If they have financial problems, gambling debts, or are going through a costly divorce, they are most likely not going to broadcast it at the office.

The motivation to steal may be a result of personal crisis or a lavish lifestyle. It may be a desire to “get even” because they feel they are underpaid or overworked. Regardless of the reason, employee theft is one of the most common and costly expenses faced by businesses today.

Employee Theft claims at CPA firms1

  • The engagement partner at a CPA firm embezzled over $1.5 million from multiple clients over several years. The theft came to light when a client noted an unusual balance on a statement.
  • A long-term employee at a firm stole a substantial amount of money from a client over a 5-year period by writing unauthorized checks to herself. The CPA who signed the checks never reviewed the supporting documentation for the payments.
  • A “star” associate brought a wealthy elderly client to a firm, and then proceeded to write unauthorized checks to herself. The thefts were discovered by the client’s heirs after her death.

Did you know?2

  • The median amount lost in an employee theft claim is $150,000
  • 5% of an organization’s revenue is lost to fraud every year
  • 23% of employee theft cases cost $1 million or more
  • The average office fraud goes on for 18 months before being detected
  • The most frequent thefts involve billing and check tampering schemes

Coverage Overview3

  • Employee Theft coverage limits are available from $100,000 to $2.5 million
  • Deductible options range from $100 to $500,000
  • Covered property includes money, securities, and tangible property other than money and securities that have intrinsic value
  • Provides coverage for theft from third parties such as clients
  • Definition of theft includes unlawful taking of covered property by both employees and partners
  • Covers theft of covered property that occurs on and off the Named Insured’s premises
  • Coverage written on discovery basis―applies to loss discovered by the Named Insured during the policy period
  • Coverage extends to theft from an Employee Benefit Plan (including the firm’s)

Frequently Asked Questions

What is Employee Theft coverage?
The Employee Theft coverage endorsement provides coverage to an employer from financial loss due to the fraudulent activities of an employee or group of employees. The loss can be the result of the employee’s theft of money, securities, or other property belonging to the employer or a third party such as a client.

Is Employee Theft covered by my property insurance?
If you have a Business Owners Policy (BOP), it will typically include $10,000 or $25,000 of Employee Theft coverage. With the average employee theft claim costing $150,000, your BOP coverage may be insufficient.2

Why should I add Employee Theft endorsement to my AICPA Professional Liability Insurance policy?
Employee theft can be difficult to detect. The crime can go on for years, resulting in losses that can bankrupt a business. Adding the Employee Theft endorsement to your AICPA Professional Liability Insurance policy is an affordable way to help reduce your exposure and ensure peace of mind.

For rates and to initiate coverage, please contact Aon Insurance Services at 800-221-3023.

1Deborah K. Rood, CPA and Gretchen McCole, “All in a dishonest day’s work,” Journal of Accountancy, August 2014.
2“Report to the Nations on Occupational Fraud and Abuse: 2016 Global Fraud Study,” Association of Certified Fraud Examiners, 2016.

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