Many small business owners think “it won’t happen to me,” so it is important for them to know that they face as much risk for employee crimes as large organizations. All industries experience their own type of risks.
Hotel
An employee working as an administrative assistant at a hotel stole over $300,000 over the course of six years. The employee had access to the hotel’s finances and added excess payments to their paychecks.
IT Consultant Company
An employee responsible for managing computer equipment inventory intentionally ordered, stole, and then sold computers and other IT equipment worth more than $900,000 over a three-year period
Manufacturing Company
An employee conspired with a supplier to pay for product he diverted and sold to their “private” customers costing the company over $350,000.
Restaurant
The purchasing director used the company credit card for unauthorized personal purchases costing the company over $500,000 spanning over a two-year period. s, the assistant manager approved invoices for payment to a fictitious vendor he created for over $1.2 million.
Janitorial Company
An employee of a janitorial company stole tools and supplies worth more than $150,000 from its school district client with whom the janitorial company had a written contract.
Must-Have Insurance to Help Protect Against Employee Theft – The Hartford
Other Business Liability Risks
Theft
Organized retail crime, shoplifting and employee theft are on the rise in the retail industry, according to the National Retail Federation. And an increase in theft can negatively affect your bottom line.
Slips, trips and falls
When you open your doors at the start of each day, your store may be pristine. But as the day goes on, customers move items around to find what they’re looking for. Employees restock shelves. And your store may not be so neat and tidy anymore.
Conduct regular walkthroughs to ensure items are put away and don’t clutter walkways to reduce the risk of injury. Create a checklist for each store area that lists everything your employees must do to properly maintain it. Assign employees specific times of the day when they are responsible for tidying up.
Product liability
While you would never sell someone a defective product intentionally, it can happen. And when it does, it has the potential to cause injury and property damage.
You can reduce your risk of product liability claims by working with reputable vendors you trust to provide safe items. Inspect the products you regularly sell to make sure they meet high-quality standards. And keep up with product recalls, so you don’t inadvertently sell someone an item that was recalled.
Vandalism
Although vandalism is less common than the other claim scenarios we’ve explored, it can happen at any time. Someone might decide to use your storefront as their canvas, break the windows, tear down signage or otherwise damage your property.
Cybersecurity
Retailers have always been attractive targets for cyber attackers and data thieves. But now, cybersecurity issues in retail have become an even bigger concern. Consider these recent (2020) retail cybersecurity statistics:
- 34% of retailers said cybersecurity worries were their primary hindrance in moving to e-commerce (BDO)
- 34% also said that cyber attacks or privacy breaches were their most serious digital threat (BDO)
- Financial motives drove cyber attackers in 99% of retail cyber attacks (Verizon 2020)
- When data is compromised in an attack, 42% is payment information and 41% is personally identifiable data (Verizon 2020)