 | | Susan Gunn |
|
Power Thought: Susan Gunn Solutions
Employee Dishonesty Bonds, aka Fidelity Bonds or Crime Bonds, need to be obtained on every employee handling your finances. This way, if you ever have an employee who chooses to be dishonest, there is coverage for the missing funds, missing products, missing time and subsequent investigation costs. What is an Employee Dishonesty Bond? Good question. According to the ever so reliable Wikipedia, "A fidelity bond is a form of insurance protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees." That's a summary and there are various levels of bonds. Whether your employee is off site or on site at the time of the theft. The monetary value of the bond coverage. How the loss was incurred. And, in most cases, what extent of background checking was done prior to hiring. What is covered? Typically, the policy covers employee thefts and robbery, but can also include forgery, credit card fraud, fund transfer fraud, and computer fraud. Policies can vary - be sure to read yours carefully to ensure maximum coverage. How much coverage? Within your practice's existing general liability coverage, you may have employee dishonesty coverage. However, the limits of that coverage are minimal at the best. I recommend additional coverage for anyone and everyone handling patient payments or your accounting, with a minimum of $250,000.00 to $500,000.00 coverage. You may think you do not need this drastic coverage. However, let's talk a bit about the facts. Embezzlement Dirty Facts At LEAST 3 out of 5 practices are currently being embezzled in some regard. Some embezzlers are padding payroll, some are through petty cash, some are more complicated with a much greater dollar volume. The average practice employee theft is currently averaging $250,000.00 prior to discovery. In other words, it's only when the amount is large, does someone finally pay attention to the missing funds. And by this time, it is typically over an extended period of time. Investigating an embezzlement typically lies on the practice. City, State and Federal budgets restrict investigations, more specifically, how much time is spent on the investigation. Then, add the limited practice knowledge for the investigator, more specifically, the type of software used in the practice. Not only do I believe every embezzlement case should be prosecuted, but so does the insurance company. In order to collect on the employee dishonesty insurance, the case must be filed with either local, state or federal law enforcement. In other words, you will need to hire someone like me to do the embezzlement investigation, which includes the forensic accounting, documentation,interview, and written summaries. This process is expensive but most often needs to be done for successful prosecution. This case filing protects you and your fellow practice owners from hiring the wrong people for your practice. Well, it protects you if you actually do background checks.... Typically, included in sentencing, is an order of restitution. This means, legally, in addition to serving a sentence and paying a fine, the embezzler is ordered to repay the practice. A sentence has not been completely served until all aspects of the sentence have been satisfied. March 2, 2011, the chief financial officer of a large pediatric medical group plead guilty $355,262. Read the article here and pay close attention to the sentencing and the determination of the doctor. Call your practice insurance agent. Shop around. Get quotes. Compare coverages. Read the policies. Ask questions. Employee Dishonesty bonds are protection.... a "just in case," but are not meant to replace background checks or practice owner oversight. If you think it's too expensive, add up the cost of embezzlement. The scale will always tip in favor of having Employee Dishonesty bonds! More About Susan Gunn Solutions... | 
