By David Wilhite
Are you aware of the benefits of employee-dishonesty insurance? Many self-storage facility owners aren't, although this coverage can be as important as fire or liability insurance when it comes to protecting your operation. If you have one or more employees, please take a few moments to learn how this useful and affordable coverage can help safeguard your business.
Employee theft ranks as one of the most under-reported crimes in the United States today. Estimates vary, but it can safely be said that more than $2 billion worth of money and property are stolen by trusted employees each year. Unlike burglary and robbery, losses due to employee dishonesty are excluded under virtually all commercial-property policies. In other words, without specific coverage, you are at risk. Unfortunately, employee-dishonesty insurance is often overlooked by facility owners who choose not to be suspicious of the people working for them. This is an unfortunate situation, as your most trusted employees are in the best position to use their knowledge of your business operations to steal or embezzle from you.
What can you do to protect yourself from employee dishonesty? In addition to securing adequate insurance protection, the best available defense includes implementing strict operating controls in combination with careful employee supervision. Some of these measures are listed below, but let's take a brief look at some of the commercial crime exposures facing self-storage facility owners and the coverages available to protect yourself against them.
Crime coverages can protect you against losses from robbery, burglary, theft, embezzlement and other risks, and can be tailored to fit the size and scope of your self-storage operation. In most cases, your business property and liability-package policy can be endorsed to provide coverage against employee dishonesty, as well as the loss of money and securities from your premises, and the loss of other covered business property such as computers.
One important point to remember about employee-dishonesty claims is that "dishonest acts" must be committed with "manifest intent." That is, a loss resulting from an unethical act, such as lying, must be due to the employee seeking personal gain. Without manifest intent, such claims would be disallowed. Also, inventory-shortages claims are excluded from employee-dishonesty policies because losses can occur from a variety of reasons besides theft, such as accounting errors. Consider also that money and security claims, and business-personal claims are not the only losses that can be covered under employee dishonesty. Riders are available to protect you against check forgery, credit-card misuse and computer fraud to supplement your existing protection at extra cost.
There are several commonsense measures that can help minimize your risk of theft. Checks should be immediately stamped "for deposit only," for example, and invoices should always be stamped "paid" to circumvent the chances of paying the same invoice twice. Implementing security controls and procedures, such as installing video-surveillance cameras in your manager's office and other key locations, can also help deter the risk of theft. However, for true peace of mind, your best bet is to purchase adequate dishonesty insurance coverage. Consult your insurance agent or broker for complete details. No matter how large or small your self-storage facility may be, securing adequate coverage is essential for protecting your business and your peace of mind.
David Wilhite is the marketing manager of Universal Insurance Facilities Inc. Universal offers a complete package of coverages specifically designed to meet the needs of the self-storage industry, including loss of income, employee dishonesty, comprehensive business liability, hazardous-contents removal and customer storage. For more information, contact Universal at Box 40079, Phoenix, AZ 85067-0079; phone (800) 844-2101; fax (602) 970-6240; Web: www.vpico.com/universal.
Staffing Concerns for Facility Owners
If you own a large self-storage facility, you know that your success depends, in large part, on how effectively you recruit, train and manage your employees; but that's only the tip of the iceberg. Today, there is a huge variety of employee-staffing issues that you need to be aware of in order to protect yourself and your operation from risk.
For example, when interviewing prospective employees, you need to know the legalities of recruiting and hiring for your particular state, as well as federal regulations concerning workers' compensation and other issues. Federal law requires every employer to provide a safe working environment for their employees as well as safety training. In nearly all 50 states, the law requires every employer to provide workers' compensation insurance, which protects you against lawsuits by injured employees.
It is important for you to know that without workers' compensation you may be found liable for accident injuries sustained by an employee, even if they are clearly at fault in causing the accident. In fact, without workers' compensation, you may be held liable even if the employee is injured while committing a crime, such as burglarizing your facility. That's why, in addition to securing workers' compensation coverage, it pays to keep your employees informed at all times about any existing hazards, to take the time to listen to their concerns, to give them the proper tools and training to do their jobs, and to offer proper supervision to see that those jobs are done safely.