by Bryan Truitt and Jim Du Molin
Even if you have an internal controls system that makes embezzlement difficult, the danger of collusion still exists. (I’ve already told you that embezzlement is common, it can be detected, and it can be prevented.) One of the ways in which some dental practices protect themselves from employee dishonesty is by bonding their employees.
Bonding is the process by which an employer can be indemnified for the loss of money or other property sustained through dishonest acts of a “bonded” employee. Bonding can cover many types of acts including larceny, theft, embezzlement, forgery, misappropriation, wrongful abstraction, willful misapplication, or other fraudulent or dishonest acts committed by an employee, alone or in collusion with others.
There are several types of fidelity bonds. Discuss each with your agent to determine whether damages from negligence are covered. Basically, your practice has several options at its disposal:
- Individual: covers one employee. Usually purchased by small practices or family-operated businesses with only one employee.
- Name schedule or position schedule: covers either the employees or positions specified.
- Blanket fidelity: covers all employees.
- Commercial, blanket, and blanket position: provides multiple protection (comprehensive dishonesty, disappearance and destruction coverage, or a blanket crime policy).
There is wide choice in features and coverage as well as cost differences in bonding coverage. It difficult to understand why only two practices in ten have this economical insurance.
Next week, we’ll talk about what to do when you have discovered a problem.