Employee retail theft is estimated at more than $10 billion. The number of retail employees apprehended for theft in 2005 jumped 11% from the number apprehended in 2004; and retail theft is on the low end of industries that experience theft. "Theft Survey," Hayes International Theft Survey, Employee Theft (Nov. 27, 2007).

Additionally:

• One out of every 27.9 employees was apprehended for theft from their employer in 2006. (Based on comparison data of over 1.85 million employees.)
• In 2006, survey participants apprehended 66,507 dishonest employees, an increase of 6.57% over 2005's apprehensions.
• Dollars recovered from dishonest employee apprehensions totaled over $56.6 million in 2006, a substantial increase of 16.44% over 2005's recovery dollars ($48.6 million).
• The average dishonest employee case value in 2006 was $851.44, a 9.26% increase over 2005 ($779.27).

The industries that experience the lowest number of employee thefts are retail, sales and hospitality. This is most likely due to high levels of accountability and security in these industries.

By contrast, the industries that have the greatest number of employee thefts are health care, information and technology, and manufacturing. Maureen Milford, "Raiding the Supply Closet Hurts Companies' Pockets," The Journal News, Gannett News Service (Apr. 2, 2007).

There is nothing petty about petty theft in an organization. Consider the account of a man who owned a nightclub for 14 years. He knew that employees would occasionally help themselves to a free drink in the evenings, but he began to pay closer attention when he noticed an employee on the cleanup crew leaving with a six-pack of beer each morning.

He now estimates his lost income at $2 million.

Here are some crafty methods that employees may use to steal:

• Forging Receipts. Salespersons can charge a customer one sum, ring up a receipt for less, and pocket the difference.
• Hiding Receipts. When accounting is sloppy and little supervision exists, employees can keep cash and receipts without raising an eyebrow.
• Pocketing Loose Change. Small sums of money, such as fees or petty cash, may not be missed at all.
• Pilfering Merchandise. Goods your organization purchases may never even make it to the shelves.
• Fictitious Payroll. Occasionally, personnel managers will authorize salary for fictitious workers, then keep it for themselves.
• Overbilling Expenses. Managers with expense accounts may submit receipts twice and be reimbursed twice or inflate actual expenses incurred.
• Purchasing Fraud. Employees sometimes declare themselves suppliers of nonexistent goods and, subsequently, reimburse themselves handsomely.

No matter how well conceived, internal loss controls frequently fall short of stopping a trusted employee from stealing. Fidelity and crime coverage provides an important backstop to private companies against the actions of a thieving employee. To access the Fidelity & Crime product, log onto www.bigimarkets.com and select the Fidelity & Crime product from the commercial products menu. You will notice that this product can also be bundled with other coverages such as Employment Practice Liability and Directors & Officers liability by accessing the Wrap + product, which is also on Big "I" Markets. In addition, The Global Risks 2010 report presented at the World Economic Forum in Davos-Klosters, Switzerland contains many trends of interest to independent agents, including those related to crime loss. Not only did the report identify a troubled economy's influence on crime loss potential, but a recent article in the Wall Street Journal noted the same link through a feature story about increasing thefts of semi-trucks and their payloads. The economy-crime correlation seems logical, but do industry numbers bear this out? And, how can an independent agent use this information?

A clear trend emerges when fidelity and burglary/theft insurance industry statistics from 1966 to 2008 are compared to unemployment statistics as published by the Bureau of Labor Statistics from 1960 through 2009. It is evident that with each peak in unemployment, there are one or two subsequent peaks in insured fidelity losses. You can use this information to help you get the attention of prospects