What Insurance Covers Employee Theft and Embezzlement?

Commercial crime insurance is the usual place to look for a business’s direct financial loss caused by dishonest conduct by an employee. A Travelers specimen, for example, has a distinct Employee Theft insuring agreement for direct loss of money, securities, or other property caused by employee theft or forgery. The California Department of Insurance likewise lists embezzlement among causes that purchased crime coverage may address. These sources describe possible coverage, not a promise that every crime policy includes it.

Check whether the quote includes employee theft, how it defines an employee, whether temporary or leased workers are included, and whether the limit is per loss or subject to a smaller sublimit. The specimen excludes some losses caused by dishonest acts unless a specified coverage agreement restores coverage, illustrating why a label alone is not enough.

If the employee took a customer’s property rather than the company’s, check for a separate employee theft of client property grant. Also review the discovery and reporting conditions, deductible or retention, prior-known-loss language, and whether defense expenses reduce the limit.