Crime Coverage for Staffing Firms and PEOs
Did you know an estimated 7 percent of gross revenue is lost due to internal theft?* Although that figure is generalized across all industries, it’s also a number too big to ignore, especially given the high turnover rates experienced by staffing firms and PEOs.
Effectively screening employees prior to hiring is the best preventative measure for what insurance carriers call an “employee dishonest act,” or simply, employee theft. But even with the best procedures in place, a company can’t screen out 100% of the bad apples. Thus, it’s essential to have crime coverage specifically tailored to your risk.
If structured properly, below are some of the major protections a crime policy can offer your staffing company or PEO:
- Internal Indemnification – a crime policy will indemnify your company should an employee steal money or property from your office.
- System Access – crime coverage should include protection from fraudulent access to your computer system and fraudulent alteration of data within that system.
- Funds Transfer – your insurance carrier will cover fraudulent instructions to your bank to transfer funds to a falsified account.
- Client Indemnification – coverage can be added to indemnify your client should an employee steal money or property from the jobsite. This enhancement is very important as your temporary workers will rarely be at your office, and a basic crime policy isn’t written to cover such incidents.
- New Business – we’re routinely seeing this coverage as a contractual requirement in client agreements, so your policy can help secure new business.
- Defense Costs – in addition to indemnifying a client should your employee steal from them, a crime policy will also pay for your defense costs in the event your client files suit against you.
Assurance has several carrier partners with coverage forms tailored specifically for staffing firms and PEOs. While minimizing financial risk and maximizing coverage can be difficult – it’s what we’re good at, so contact an Assurance representative today.
*Association of Certified Fraud Examiners
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