Is theft hurting your company’s bottom line? Businesses can incur losses from multiple types of theft, and these losses can take a bite out of your company’s profits. Strong theft prevention strategies can help protect your business.
The Different Types of Theft
The term “theft” can encompass many different types of crimes:
- Burglary: According to the FBI, there were more than 1 million burglaries in 2019, resulting in losses of approximately $3 billion. Around one-third of burglaries target non-residential properties, such stores and offices.
- Robbery: The FBI says that robberies impacted more than 3,000 banks, 14,000 convenience stores and 6,000 gas or services stations in 2019.
- Shoplifting: The NASTAS says that shoplifting is the number one property crime in the U.S. There are more than 500,000 shoplifting incidents every day, and goods worth around $13 billion are stolen every year.
- Cargo Theft: Goods can also be stolen in transit, and rail thefts and truck thefts are a growing concern. Union Pacific says that rail thefts increased by 160% in Los Angeles County in 2021.
- Business Email Compromise: In this scam, criminals use email messages or other means of communication to pose as legitimate contacts and trick the victim into making a wire transfer or other transaction. The IC3 received 19,369 business email compromise complaints in 2020, with losses of more than $1.8 billion.
- Employee Theft: Employee theft can range from stolen office supplies to large-scale embezzlement. According to the Hiscox Embezzlement Study, businesses impacted by employee theft lost an average of $1.13 million, and small and medium sized businesses are disproportionately impacted.
Managing Your Risks and Exposure
Theft is a complicated problem. Because there are many different types of thefts, businesses need to take a multipronged approach to managing their various exposures. Key elements of a strong theft prevention strategy will involve physical security, cybersecurity, inventory control, strong company policies and robust insurance coverage.
Physical security measures can help deter shoplifting, burglary and robbery. Here are some actions to consider taking, depending on your risks and situation:
- Install an alarm system. An alarm system can alert you to problems and scare off criminals.
- Install security cameras. People may be less likely to steal if they know they’re being watched, and cameras can also produce useful evidence.
- Hire security guards. Security guards can add an extra layer of protection.
- Eliminate places for criminals to hide on the premises. Consider lighting and landscaping features.
Business email compromise scams and other types of online fraud are a growing problem, so cybersecurity is essential. In addition to having secure computer systems, it’s important to train workers on how to avoid scams. The FBI recommends the following steps to avoid business email compromise schemes:
- Be careful about the information you share online.
- Don’t click on unsolicited email or text messages.
- Examine email addresses, URLs and spelling carefully.
- Be careful about what you download.
- Set up two-factor or multifactor authentication.
- Verify payment and purchase requests in person if possible.
- Be wary of people who pressure you to act quickly.
Inventory and Cash Control
The sooner you catch shoplifting or employee theft, the sooner you can take steps to stop it.
- Conduct regular inventory reviews. This will help you determine whether theft is occurring.
- Consider locking up items that may be frequently stolen or putting security tags on items.
- Create procedures to limit who handles and has access to cash.
Strong company policies may help you deter employee theft.
- Conduct background checks as part of the employment screening process.
- Know who has access to the property. When an employee quits or is terminated, make sure the employee no longer has access to the property by having keys returned and changing security codes.
- Include an employee theft policy in the employee handbook and make sure all employees understand the policy. Employees may think that’s it’s no big deal if they take something or give it to their friends. Make sure they understand that your company takes theft seriously and create clear policies regarding the consequences of theft.
Theft prevention is always best, but if a loss occurs, insurance can help you recover. Different types of theft may be covered under different policies and endorsements. Talk to your insurance broker about coverage for burglary, cybercrime, employee theft and other losses.
Theft prevention is just one of the many risk management issues that modern businesses need to consider. Do you need help reviewing your business insurance coverage? BNC Insurance is here to help. Contact us for assistance.