My Packer Stole Inventory: Crime Insurance

By / January 22, 2026

I grew my resale business and hired a kid to pack boxes. Inventory started drifting. A pair here, a pair there. I checked the cameras and saw him slipping Yeezys into his backpack. I fired him and filed a theft claim. My business insurance denied it citing the “Employee Dishonesty” exclusion.

Key Takeaways

  • The “Insider” Exclusion: Standard property insurance covers theft by strangers. It explicitly excludes theft by employees or anyone you entrust property to.
  • Fidelity Bonds (Crime Coverage): You need to buy “Commercial Crime” insurance or an “Employee Dishonesty” bond. This pays you if your staff steals from you.
  • Prosecution Requirement: Most fidelity bonds require you to press criminal charges against the employee to get paid. You can’t just fire them and claim the cash.
  • Background Checks: If you didn’t run a background check and hired a known felon, the insurer might deny the claim for “Negligent Hiring.”

The “Why” (The Trap): Entrustment

Insurance is a game of risk. The insurer calculates the risk of a burglar breaking in. They cannot calculate the risk of you hiring a thief. That is a management problem, not an insurance problem—unless you pay extra for Crime coverage.

The Investigation (I Called Them)

I looked at Business Owners Policies (BOPs).

1. The Hartford

  • Option: “Employee Dishonesty” endorsement.
  • Limit: Usually starts at $10,000.
  • Cost: ~$100/year extra.
  • Verdict: A no-brainer if you have staff.

2. Wax / Collector Policies

  • Scenario: I have a “collection manager” who steals.
  • Result: Likely excluded under “Voluntary Parting” or “Entrustment” unless specifically endorsed.

Step-by-Step Action Plan

  1. Audit Inventory Weekly: You can’t claim what you can’t prove. If you say “I think I lost 10 pairs over 6 months,” denied. You need “On Monday I had 10, on Tuesday I had 9.”
  2. Add the Endorsement: Call your agent. “Add Employee Dishonesty coverage, limit $25,000.”
  3. The “Rule of Two”: Never let one employee handle the high-value cage alone.
  4. Prosecute: If you catch them, file the police report. The insurance company needs the police report number to process the Fidelity Bond claim.

[IMAGE: Security camera still of an employee putting a shoebox into a backpack, with a “Claim Denied: Employee Exclusion” stamp.]

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