To be a victim of employee fraud is not a pleasant experience, especially in a construction business. But knowing your options on how to recover from such an incident increases your chances of recovering damages and preventing theft from reoccurring.
Misusing Corporate / Business Cards
Whenever a worker returns extra tools or supplies, they have procured and then spends the in-store credit for their personal needs, that is one of the most common kinds of first-party fraud in the construction business. If a worker purchases extra fittings, for one, they can return them and receive the in-store credit instead of continuing to put the costs back on the corporate card.
The following measures can be used by construction companies to deter fraud and recuperate economic damages.
Speak with an attorney to learn more about your alternatives.
Getting in touch with a lawyer first will present you with the most accurate and up-to-date knowledge. But if you have a Fidelity Bond or Employee Dishonesty coverage, in that instance you should notify your insurance carrier as soon as possible.
It’s fine if you don’t consult with a lawyer consistently. Many lawyers provide free telephone consultations. Consider asking lawyers in your neighborhood if they would be willing to talk to you over the line. Attorneys can help to determine if contacting law enforcement would indeed be helpful or detrimental at this particular time for your firm.
A lawyer can also tell you when you can file a claim. Staff theft victims in California, for instance, can promptly bring a lawsuit against the perpetrator and have his or her property seized. By speaking with a legal professional, you can be certain you are obtaining the most up-to-date facts according to your region/state and the authority in your locality.
File a claim on your theft insurance.
The standard liability insurance covers claims like personal harm and property damage, however were you aware you can still have a second policy to cover employee fraud.
Employee Dishonesty Bonds, also referred to as Fidelity Bonds, are contracts that safeguard against economic damage as a result of employee fraud. When you start looking for equipment dealers you also start searching for equipment insurance. Having theft insurance is just as important as having insurance for your Cat heavy equipment. You can find different types of bonds and insurance that protect businesses from fraud.
Based on the form of Fidelity Bond you obtain for your firm, it may cover the following:
Your company from embezzlement, which is important for all organizations
Your customers from financial fraud, that is beneficial if you and your staff are accessing your clients’ residences or assets, such as in the case of residential remodeling contractors, house repair companies, and so on.
A certain level of fidelity or theft insurance may be included in your Business Owners Policy. To be sure, verify with your authorized provider.
You can lodge a claim against your Fidelity Bond if you were a recipient of fraud and have a Security Bond. If the insurance firm finds the claim to be legitimate, you will be reimbursed monetarily for the sum that the person took.
Prior to actually determining if the claim is legitimate, the insurance firm will verify that the loss is covered by your policy and that you have filed the claim within the appropriate time frame. Some contracts, for instance, have a conviction provision that requires the suspected thief to be prosecuted before a claim is paid out. That is also a compelling reason to contact your agent to evaluate and confirm your theft protection.
Fidelity bonds are often cheap in comparison to the protection they give. The application procedure is simple, and the price is proportional to the number of workers.
If you can’t get your money back through an agent or a claim on the fidelity bond, you might want to consider pursuing a civil lawsuit through the criminal court system.
If the damage was minor, you could sue for damages in small claims court. However, if the loss is significant, you must consider whether or not a lawsuit is worth the compensation.
Be cautious when you fire an employee.
Consider firing the worker if you believe you have sufficient proof and/or the inquiry is complete. To guarantee that the worker cannot return and take legal action against your organization, be certain to dismiss the worker according to organizational policies. Keep in mind that the job isn’t finished even after you’ve let your worker depart.
Pay the employees wages
Although it may be tempting to dock the employee’s paycheck you should not do this. In fact, there are states where organizations and businesses don’t have the ability to do this.
Lastly, you should remember not to get rid of the evidence. you may want to get rid of anything involving the theft but you should hang on to it. Remember that in business it is better to keep things longer than you may think Is necessary.