Employees covered must normally reside within Great Britain, Northern Ireland, the Channel Islands or the Isle of Man, but will be insured whilst temporarily working abroad. In many cases, arrangements may be made to include in the policy employees permanently working abroad.

The policy will cover any thefts from the Insured by former employees, during the period of 30 days following termination of employment.

Usually quotations will be subject to agreement of minimum standards of control in respect of supervision, accounting procedures and for checking the security of money or goods. These standards are straightforward and will have been tailored to the circumstances of the risk. It may be that you already operate to a higher degree of security. Nevertheless, if you consider that your own procedures will not comply with the minimum standards put forward by insurers , then alternatives can be considered.

If you agree to accept responsibility for the cost of smaller thefts the procedure will be simplified even further. Larger companies or organisations who have an acceptable internal audit department operating to professional standards, and who agree to accept responsibility for small thefts, will be asked only to maintain regular audits and stock checks, with the auditors left to determine detailed procedures.

The minimum standards, which have been agreed, will be incorporated in the policy schedule. You will be asked to undertake to operate them, not make any change without the agreement of insurers and instruct employees as to their duties. If despite this, a claim results from the failure of an employee (other than the actual employee committing the theft) to observe the minimum standards, provided that this was without the knowledge or consent of the Insured or of any Responsible Official, we will still pay the claim subject to the Insured bearing 20% of the claim. This will be in addition to the amount of any policy excess already agreed, provided that the contribution in all is not less than £2,500. The claim will be paid in full where the minimum standards have been deliberately evaded by the employee committing the theft and this is without the knowledge of any other person who is a Responsible Official, or of the Insured.

In addition, requirements will be agreed regarding the obtaining of references for new employees.

Exposures not Covered:

• Unexplained stock shortages
• Loss of interest
• Consequential loss

Who should you insure?

The short answer is everyone. In the past it was the practice to pick out only certain individuals or categories, such as accountants or cashiers, who are considered to be high risk employees. This can result in claims settlement difficulties and, in these days of computerised accounting, there is the ever present risk that a relatively junior employee may be able to commit a substantial theft undetected.

Limit of Indemnity

Only you can select the Limit of Indemnity appropriate to your business, but do take a realistic view. The limit chosen is the maximum we will pay for claims arising out of any one occurrence of theft continuing throughout the period of the policy. The fraud may continue undetected for many years. We've given examples of some substantial claims. You must consider your particular requirements, taking into account:

• The type and size of your business
• Amounts at risk
• The possibility of collusion
• How long fraud may continue undetected
• If you are concerned only with the prospect of very large losses, your premiums could be lower if you accept responsibility for smaller frauds in the form of a policy excess

Some Important Extras

The policy will pay auditors fees incurred to substantiate the amount of a claim. Cover also includes costs of rewriting or amending computer programs or security codes, where it is necessary to correct the programs or amend the security codes following fraudulent use of the computer system, the subject of a valid claim under the policy.

• On expiry of the policy cover you have two years in which to discover and claim for any theft.
• There is no requirement in the policy that defaulting employees be prosecuted. This is a matter for the police and yourself.
• Provided that it can be proved that the loss was caused by any one of the employees insured, it will not be necessary for the employee concerned to be identified.
• Cover may be arranged with a limit of liability in respect of each occurrence of loss, without an aggregate limit in respect of losses in each insurance year.
• High limits of indemnity can be provided.
• Our policy includes cover for computer fraud caused by an employee; an extension is available to protect employers against theft of money or goods resulting from computer fraud perpetrated by third parties
• If you have previously been insured you will not suffer loss of cover by transferring to new insurers. Our policy will automatically provide insurance in respect of losses which would have been covered under your previous policy, but which are not recoverable because the time allowed for discovery has expired provided cover has been continuous.
• Cover may be extended to include trustees of any pension fund or staff benefit scheme in respect of theft of funds by either employees of the insured or 'trustees' who are not employees.

Click here to download proposal forms and a specimen wording.

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