Employee Theft: "My Helper Walked Off with My Drill Set."

Employee Theft: “My Helper Walked Off with My Drill Set.”

I hired a helper off a local app. He worked for two weeks, then stopped showing up. Also missing? My brand new Makita kit and a rotary hammer. I called the police, then my insurance. The adjuster asked, “Did you give him the keys or access to the site?” I said yes. He said, “That’s voluntary parting.”

Key Takeaways

The “Dishonesty” Exclusion: Standard property insurance covers theft by strangers. It specifically excludes theft by employees or anyone you entrust with the property.
You Need a Fidelity Bond: To cover employee theft, you need “Employee Dishonesty” coverage or a “Fidelity Bond.” This is a separate product or endorsement.
1099 vs. W-2 Matters: Some bonds only cover W-2 employees. If your helper was an independent contractor (1099), the bond might not apply unless specifically endorsed.
Prosecution is Required: To collect on an employee theft claim, you almost always have to file criminal charges against the employee. You can’t just “let it go” and ask insurance to pay.

The “Why” (The Trap): Entrustment

The clause is usually titled “Dishonesty” or “Entrustment.”

It says: “We will not pay for loss caused by… any of your partners, employees, directors, or anyone else to whom you entrust the property.”

By giving the helper the code to the job box or the keys to the van, you “entrusted” the tools to him. Therefore, it is not “theft” in the eyes of a property policy; it is a breach of trust/contract.

The Investigation: “I Called Them”

I looked for coverage for “Theft by Staff.”

1. Standard Inland Marine

The Result: Denied. Cited “Employee Dishonesty” exclusion.

2. Business Owners Policy (BOP) with Crime Endorsement

The Result: Covered up to a limit (e.g., $5,000), provided I filed a police report and pressed charges.

3. Janitorial/Service Bonds

The Result: These are designed for this. If I had purchased a $100/year “Business Service Bond,” it would have paid out immediately upon conviction.

Comparison Table: Who Steals Matters

Thief	Standard Policy	Employee Dishonesty (Crime)
Random Stranger	Covered	N/A
W-2 Employee	Denied	Covered
1099 Contractor	Denied	Covered (If endorsed)
Business Partner	Denied	Usually Denied (Internal dispute)

Step-by-Step Action Plan

File a Police Report: You must name the suspect. Do not be vague. “I suspect John Doe took it.”
Add “Crime Coverage”: Call your agent and ask to add “Employee Dishonesty” to your BOP. It’s cheap (~$50/yr for $10k coverage).
Background Checks: In 2026, insurance applications ask if you background check employees. If you say “Yes” to get a discount but didn’t check this helper, they can deny the claim for misrepresentation.
Inventory Control: Have employees sign out expensive tools. It makes the “theft” easier to prove legally.

FAQ

Q: What if I don’t want to send him to jail?
A: Then you don’t get the insurance money. Insurers require prosecution to prevent fraud (e.g., you and the employee splitting the insurance money).

Q: Does it cover cash he stole?
A: “Money and Securities” is a different coverage section than “Business Personal Property.” You need specific Money coverage for cash theft.

[IMAGE: Screenshot of a “Fidelity Bond” application asking for “Number of Employees” and “Limit of Liability”.]I hired a helper off a local app. He worked for two weeks, then stopped showing up. Also missing? My brand new Makita kit and a rotary hammer. I called the police, then my insurance. The adjuster asked, “Did you give him the keys or access to the site?” I said yes. He said, “That’s voluntary parting.”