New York Employee Theft Insurance Policies and The Culture That Spawned Them May 5, 2009

As I was sifting through my e-mails, I came across an article that commented in an off-the-cuff fashion how a small business can ill afford to risk being uninsured against employee theft. While many of us were and are aware that these policies are readily available as addenda to business insurance policies, I was more than a little taken aback by the  tenor of this article, and its implicit assumption that if you don’t get this type of insurance, you are all but certain – and perhaps deserve – to lose your shirt.

As a New York business litigation attorney, I have to recommend that my clients purchase such policies (although by the time they’ve called me about their particular problems with regard to employee theft and/or breach of fiduciary duty, it’s usually too late for that).  That said, I find the article’s underlying assumption that employee theft should somehow be taken as a given is fundamentally flawed both from a moral and business perspective.

Leaving aside how troubling this assumption is on a moral plane (have we, as a society really reached the point where it should surprise us when people have integrity rather than rob us blind the second they are given the chance?),  in my view, these problems, from a business vantage point, can be signficantly reduced, if not eliminated in the following way: once the decision has been made to hire, the employer must commit to diligently and carefully vet candidates who will fit naturally into a professional atmosphere that rewards and incentivises team play and solution-geared problem solving while brooking no tolerance whatsoever for dishonesty or people who “are just looking out for #1″ (i.e., themselves).

Jonathan Cooper is a New York Business Litigation and New York Commercial Litigation Lawyer with a focus on New York breach of contract and New York business fraud claims before the Nassau, Queens, Brooklyn, Bronx, Westchester and Suffolk County courts of New York State. For more information, feel free to contact his Long Island office at 516-791-5700.

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