Fireman’s Fund Insurance Company said that it is offering tips for the 28 million US small business owners to help manage liability risks.
The company said that the recent recession and layoffs have fueled the growth of small business, but, statistically, about half will fail in their first five years, even in non-recessionary periods. This is why small business owners must take the necessary precautions to prevent employee theft and fraud.
According to Fireman, small businesses can minimize opportunities and temptations for employee theft and fraud by screening prospective employees thoroughly; know the employees based on characteristic changes such as sudden devotion at work and working late, lifestyles well above salary levels; and evidence of gambling, borrowing, bad check writing and requesting advances.
In addition, the company recommends small business owners to limit opportunities for employee theft by implementing controls on purchase orders, cash receipts, audits, vacation policy, computer security measures, checks, merchandise inventory, and accounts receivable.
Bruce Petersen, senior vice president of commercial insurance at Fireman’s Fund, said: “Employee theft and fraud can potentially be financially devastating for small businesses so Fireman’s Fund encourages owners to become even more vigilant in protecting their company.”