Does a BOP cover employee theft?

Complete Guide to Employee Theft Coverage in a Business Owner's Policy (BOP)

Why This Question Matters for Colorado and Utah Residents

Small businesses across Colorado and Utah face unique risks—including employee dishonesty. According to state reports, Colorado businesses experience higher-than-average property and crime insurance claims, with theft-related losses costing Colorado employers over $67 million annually. Many retail and service businesses in cities like Fort Collins, Denver, Salt Lake City, and Provo are especially vulnerable due to urban crime rates and economic pressures. Understanding your BOP’s scope ensures you’re not left exposed to costly, unexpected losses.

• Cascade of Regional Crime: Northern Colorado and Utah businesses must address rising theft and dishonesty risks, highlighted by a 14.5% share of Colorado's commercial crime occurring in the region.
• Regulatory Mandates and Limited Policies: State regulations require certain mandatory coverages (like workers’ comp), but employee theft falls outside standard BOP protection unless specifically endorsed.
• Financial Impact: The average employee theft loss for Colorado and Utah retail businesses exceeds $38,000 per incident—a significant threat for small and mid-sized operations.

What Most People Get Wrong

Many business owners assume their BOP automatically covers all internal losses, including employee theft. In reality, a standard BOP excludes losses from dishonest acts by employees unless a specific crime or fidelity endorsement is added. With rising premiums and changing risk profiles in Colorado and Utah, this oversight can create serious gaps in protection.

Another misconception is that endorsements are expensive or difficult to obtain. In fact, most major carriers easily add employee dishonesty coverage for a modest premium increase—often $20–$50 per month in regional markets.

The Complete Picture

While a BOP brings together essential coverages like property, liability, and business interruption, it typically does not automatically protect business owners from employee theft or embezzlement. To safeguard against this risk, you must add a crime or employee dishonesty endorsement (sometimes called a fidelity bond). These endorsements cover theft of money, securities, or property committed by employees, whether it’s cash register skimming, fraudulent refunds, or inventory misappropriation.

Given that most theft incidents go undetected for months, and with average regional business losses topping $40,000 per claim, adding this coverage is a practical, strategic move—especially for cash-heavy businesses or those with a high employee count. Coverage limits and premiums vary based on business size, location (e.g., Denver, Boulder, Salt Lake City), and industry risk profile, but the peace of mind and resilience it offers are well worth the modest cost. FoCoIns experts routinely recommend a BOP review to assess crime risks and close gaps before an incident occurs.

Making the Right Decision for Colorado and Utah Residents

Question 1: Have you assessed your risk of internal theft based on your business type and location?

Many Colorado and Utah businesses (especially retail, restaurants, and offices in high-traffic corridors like Denver’s Colfax Avenue or Salt Lake City’s Sugar House) have higher exposure to employee theft—but so do growing suburban enterprises in Fort Collins or Ogden.

• Review cash-handling practices and inventory controls.
• Consider local crime trends (e.g., annual crime reports), which may indicate rising risk.

Question 2: Does your current BOP show a crime or employee dishonesty endorsement?

If not, your policy likely excludes losses from employee theft. Check your declarations page for language like “Employee Dishonesty” or “Crime Coverage”—or ask your FoCoIns advisor for a quick, no-obligation review. Even a small business in a low-crime area (like Loveland or Logan) can face unexpected loss by a trusted staff member.

Question 3: How often do you review your coverage as your business evolves?

Colorado and Utah businesses grow and adapt quickly, especially post-pandemic. Anytime you expand, add locations, or increase staff, review your coverages to ensure current protection. A periodic coverage check (at least annually) with a local expert can help catch gaps that expose you to growing risks.