Specialty · Insurance Term
Employee Theft (Employee Dishonesty)
Definition
Employee theft coverage reimburses you when an employee steals money, securities or other property from your business. It is part of commercial crime insurance, and property policies generally don't cover it, because they usually exclude dishonest acts by your own employees.
In Plain English
Common examples include a cashier skimming sales at a convenience store, a bookkeeper writing checks to themselves, or an on-site manager pocketing tenant rent. These losses often build slowly and can go unnoticed for months.
Employee theft is a core part of commercial crime insurance. Many forms can extend coverage to certain non-employees, such as an outside property manager, but only when stated. Coverage typically ends for a specific employee once you learn of a dishonest act, so a known problem employee may not be covered going forward.
Crime policies treat electronic tricks separately. Social engineering fraud and funds transfer fraud often need their own coverage parts. Good controls, such as splitting duties, reconciling accounts and requiring two approvals for payments, reduce losses and can help with underwriting.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical and simplified: Over two years, an office manager at an apartment complex diverts $80,000 of tenant payments into a personal account. An audit uncovers the scheme, and the owner files a crime claim. An employee theft limit of $100,000 may cover the loss after the deductible, subject to the policy's discovery and notice conditions.
What to Watch For
- Ask whether your property management company's staff count as employees under your crime policy.
- Check whether the policy covers losses discovered during the policy period or losses sustained during it.
- Report suspected theft promptly, since crime policies often have strict notice and proof deadlines.
- Use dual signatures and regular bank reconciliations to reduce the chance of loss.
Last updated October 14, 2026 · Primesure editorial team · How We Write