What is typically excluded under employee theft coverage?

Employee theft coverage is designed to protect businesses from financial losses caused by dishonest acts by employees, such as theft of money or property. Under this type of coverage, specific exclusions are common to prevent potential misuse or overlapping of claims.

The option stating that "Loss of inventory unless proven by collusion" reflects a significant aspect of employee theft coverage exclusions. Often, insurers require a higher standard of proof for theft involving inventory, particularly when multiple parties, including employees, could be involved in collusion. This requirement helps insurance companies mitigate fraudulent claims, as collusion would imply a more complex scenario involving multiple individuals conspiring to commit theft. Without evidence of collusion, losses related to inventory may not be covered under the employee theft policy.

In contrast, theft by clients is typically excluded because employee theft coverage specifically addresses theft committed by employees, not clients or customers. Similarly, stating that all employee-related theft is covered is an oversimplification; certain types of theft, like those involving collusion or other circumstances, can indeed be excluded. Losses covered by other policies often point to the principle of avoiding duplicate coverage, where one event cannot simultaneously trigger claims from multiple types of insurance, further illustrating the importance of understanding the boundaries of coverage. Thus, the correct response