For your business to grow, you need to hire more workers. But with every new hire comes the risk of bringing someone on the team who doesn’t fit, doesn’t do great work, or, even worse, actively steals from your company.
Business fraud and company theft are primarily carried out by in-house employees. Essentially, the people who work for you are the greatest risks to your finances. Today, let’s break down how conducting employee background checks and having business insurance plans can protect your company from major fraud and financial disaster.
What’s an Employee Background Check?
An employee background check is a detailed and comprehensive exploration of a job candidate’s background. It usually involves hiring a background check company or agency to investigate a potential hire to determine:
- Whether the employee has a criminal record
- Where the employee has worked previously
- Whether the employee has been honest on their job application
Understanding all this information is vital in making a job hiring decision. After all, you don’t want to hire someone who was dishonest on their application, even if they don’t have a criminal record.
Most background checks are comprised of several major parts, including:
- A check of criminal records. This part is especially important if you are hiring a person for a very sensitive or security-oriented position.
- Validation of Social Security information
- History check for past addresses
- US terror watch list check
All of this information put together should be enough to satisfy your need to know whether a job candidate is a trustworthy individual.
Benefits of Doing Employee Background Checks
There are many benefits to employee background checks for every job candidate who applies to your organization, no matter how much you may like them in person during your interview.
For starters, basic employer background checks can tell whether a potential candidate has a criminal background or can be trusted around things like money or sensitive customer information. They can also tell you whether a candidate can be trusted around high-value merchandise without you having to wonder whether they’ll potentially steal it in the future.
Furthermore, employee background checks give you more information about an employee’s work history and life experience. For certain high responsibility positions, like those on your executive team, this can be valuable when deciding between two very similar job candidates.
Say that one job candidate forgot to mention that they previously worked in a very difficult position. If the background check reveals this, you can use that information to hire them over the competing candidate and make the best decision for your company.
Business Crime Insurance Explained
Business crime insurance is an insurance policy that businesses like yours can purchase to protect themselves from business-related crime losses. Business crime insurance can cover losses such as:
- Cash, both real or “in the bank”
- Assets like equipment
- Merchandise, like products you would normally sell to customers
- Other property loss, sometimes including damage to your business premises
Business crime insurance usually kicks in whenever someone perpetuates a crime like fraud, misrepresentation, robbery, theft, forgery, or embezzlement. In short, if any business-related crime happens to your company, you can rest assured your business crime insurance policy will cover you for associated damages.
However, business crime policies are not the same as commercial property insurance. You’ll need to purchase such a policy separately, which could take a bite out of your finances. Even so, business crime insurance could be a wise investment.
Is Business Crime Insurance Worthwhile?
For many business owners, absolutely. It’s one of the best ways to future-proof your small business!
Imagine a position where your business is robbed of much of your merchandise and important assets. When you open your store the next day, you find that you won’t be able to sell anything to customers, let alone get started making replacements since many of your assets were taken during the theft.
If you had business crime insurance in this scenario, you would likely be covered for at least some, if not all, of the damages.
Business crime insurance is worthwhile in the same way that other insurance policies are great ideas. You hope, for instance, never to have to use life insurance. But if you were to perish unexpectedly, term life insurance protects your family and loved ones from experiencing major financial stress and helps them pay for funeral expenses.
Business crime insurance is worthwhile if you want to ensure that a single crime doesn’t sink your business financially. It can secure you against employees who steal things, outside criminals, fraud through card chargebacks, and other forms of business crime you may encounter over the years.
You don’t have to conduct employee background checks or have business crime insurance. But you’ll be doing your company a disservice by implementing neither of these strategies, as they are important when securing your business against fraud and financial ruin.
Employee background checks can prevent you from making a disastrous decision when filling an open job position. Meanwhile, business crime insurance protects you from misjudgments of character or future crimes you could not have anticipated.