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Professional Insurance (Professional Liability,
Directors & Officers, Etc.)
Almost all "professional" insurance policies contain an exclusion for
fraudulent or criminal activity. They are not intended to provide
coverage for fraud, embezzlement, theft, etc. These policies
generally have provisions for "innocent insureds" and may provide
defense only coverage, but are not the products you need in place to
coverage potential fraud.
Employee Dishonesty policies are relevantly low cost risk management
tools that you can purchase to protect yourself from theft, embezzlement
and fraud from your employees and non-employees. General Liability Policies, BOPs,
and some professional liability endorsements will sometimes include
limited coverage for Employee Dishonesty but will typically not cover
third party exposures and may provide defense only coverage.
First Party Coverage
If your employee steals funds, property, etc directly from you, this is
considered a "first party" claim
Third Party Coverage
If your employee steals funds, property, etc from your client, this is
considered a "third party" claim. This is a concern if you are
providing any services where you have "legal liability" (care, custody, or control) of
client funds. This would include bill paying services, payroll,
and any check signing authority. Consider that computer access may
be considered control of client funds. The policy may also be
endorsed to provide coverage for employee dishonesty while your clients
are working at your client's premises.
Crime Coverage
If a non-employee steals funds, property, etc directly from you, this is
considered "crime coverage". Your employee dishonesty policy may
be extended to provide coverage for this including, theft, burglary,
disappearance, computer fraud, and forgery.
For more information regarding NAPLIA's Employee Dishonesty policy*
offering the above coverage
click here.
*Satisfies ERISA bonding
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