Can business insurance cover employee theft?

Business Insurance Coverage for Employee Theft in Massachusetts

In Massachusetts, business insurance can include coverage for employee theft, but it depends on the specific policy you choose. This type of coverage is commonly known as employee dishonesty coverage or fidelity bond.

What Employee Theft Coverage Includes

• Protection Against Financial Loss: Covers losses caused by employees who steal money, inventory, or other business property.
• Policy Limits: Coverage limits vary, so select a policy that matches the scale of your business risks.
• Covered Employees: Typically includes current employees, but may require additional endorsements for former employees or contractors.

Operational Considerations for Massachusetts Businesses

• Evaluate Risk: Assess your business’s exposure to employee theft based on industry, size, and cash handling practices.
• Integrate with Other Policies: Employee theft coverage is often added to a commercial crime policy or a business owner’s policy (BOP).
• Compliance and Recordkeeping: Maintain detailed financial records and internal controls to support insurance claims and reduce theft risk.
• Employee Classification: Properly classify employees and contractors to ensure coverage applicability.
• Work with Licensed Insurers: Obtain policies from insurers authorized to operate in Massachusetts to ensure compliance with state regulations.

Additional Tips

As of 2026, regularly review your insurance coverage to adapt to changes in your business operations or workforce. Combining employee theft coverage with strong internal controls and payroll systems can help reduce risk and streamline claims.