Theft by a stranger is a property claim. Theft by your own staff is not.
Property policies, equipment floaters and cyber wordings all step back when the person who took it worked for you. Employee dishonesty is its own policy, and the businesses exposed to it are the ones that trust people, which is all of them.
Start a quote file Read the short answer firstStaff dishonesty sits outside property cover.
It can run for a long time before anyone sees it.
Which date your policy answers to is set in the wording.
Does business insurance cover money or stock taken by an employee?
Not under a standard property policy, which excludes dishonest acts by your own employees, and not under an equipment floater, the separate policy that covers tools and gear on the move, which excludes the same thing. It is answered by crime cover, sometimes called fidelity or employee dishonesty. That is a separate section you have to ask for, and a business can hold a full suite of commercial policies without holding it.
Owners tend to hear this and think it does not apply to them. The exposure is not created by having dishonest staff. It is created by having any staff at all who can move money, write off stock, set up a supplier or adjust a record without a second person seeing it. In a small business the same person can end up doing all four, which is what makes the exposure easy to miss and hard to control.
An outside theft announces itself. A door is forced, stock is gone, and you know that morning. Employee theft is almost always small amounts repeated over a long period, hidden inside ordinary transactions that nobody has a reason to question. It surfaces when someone goes on leave, when a system changes, or when a new bookkeeper looks at something with fresh eyes. That delay is why the date a crime policy answers to matters so much. It is why the cover has to already be in place before you have any reason to suspect anything. The Insurance Bureau of Canada files it under crime cover, not property: “Protection against employee dishonesty and theft.” That is the line your property and liability policies do not carry, which is why it is bought on its own. Read IBC on how to buy business insurance (opens in a new tab).
Four different losses, one section.
Money and securities
Cash, cheques and similar items taken from a till, a safe or a deposit run, both on the premises and in transit. This is the oldest part of the cover, and it is the part the word crime brings to mind. It is not the only part, and the three below are worth reading as carefully.
Employee dishonesty
Theft of money, stock or property by a person you employ. Wordings differ on who counts as an employee, and whether that definition reaches temporary staff, contractors and volunteers is worth checking against how you actually staff the business.
Forgery and alteration
Cheques, drafts or similar payment documents altered or forged against your accounts. Quieter than it used to be and still live, particularly in businesses that pay by cheque or hold signing authority for clients.
Fraudulent instruction
Somebody outside the business convinces a member of your staff to send money, usually by impersonating a supplier or a director. This overlaps with cyber wordings. Depending on how each one is written, both policies may answer, one may, or neither may. That is why the two wordings should be read together rather than bought separately.
Three that were found by accident.
The bookkeeper who never took holidays
The most familiar pattern there is. One person controlled invoicing, payments and reconciliation, and never took more than a day off, because the arrangement only holds while nobody else does the job. It surfaced during a hospital stay. Requiring everyone to take a continuous block of leave is one of the simplest controls there is.
The supplier who did not exist
A new vendor was set up, invoiced modestly and regularly, and was paid without question for a long time. Nothing was stolen from the premises, so property cover was never in the picture. Two-person approval on new vendor accounts would have stopped it on day one.
The stock that was written off
Damaged goods were being recorded as write-offs and leaving through the back door. It looked like ordinary wastage until the write-off records were compared shift by shift and one name kept appearing. That last part matters. Crime wordings generally will not accept an inventory shortage on its own as proof of a loss, so a claim has to rest on records that point at what actually happened.
The ones owners find uncomfortable and ask anyway.
We are a small team and I trust everyone. Do we need this?
Trust is not a control. Separation of duties is harder when three people do everything, so a small team has fewer of the checks that catch this early. Whether to buy the cover is your decision. It is a better decision made with the wording and a price in front of you than made on the strength of how you feel about your staff.
Does it cover a contractor or a temp?
It depends entirely on how the wording defines an employee. Some extend to temporary staff, agency workers and volunteers; some do not. If a meaningful part of your workforce is not on payroll, that definition is the single most important sentence in the section for you.
What if we discover it after the person has left?
The person leaving does not close the door, but the date your wording answers to decides it. Some crime wordings answer to the date you find the loss, and those can reach acts committed before the policy started. Others answer to the date the acts happened, so the cover had to be in force back then. Both kinds give you only a limited window after the policy ends to find a loss, and that window is what the wording calls the discovery period. A wording may also set a retroactive date, a cut-off before which earlier acts are not covered. If you are changing insurers, ask which kind you are leaving, which kind you are joining, and how the discovery period is being handled, because that is where gaps appear.
Will the insurer expect us to prosecute?
Wordings vary, and a typical one requires you to co-operate with any investigation and to keep the records that prove the loss. Businesses often prefer to handle these quietly, which is understandable and can affect a claim. Read that condition before you decide how you want to deal with it.
What proof does a claim need?
Records. Bank statements, ledgers, inventory counts and the trail that shows what normal looked like. The businesses that struggle are the ones where the person who took the money was also the person who kept the records. That is an argument for the controls as much as for the insurance.
Two that sit either side of this one: what a cyber policy will not cover and what happens when tools go missing.
Not the question you had? Send your declarations page and the question with it through the quote file and you will get a written answer.
Check whether crime is on the policy, not whether it could happen.
It is one line on a declarations page. Reading it now takes a minute. Reading it after a loss is too late.