A business that we insure paid a new employee erroneously. Instead of paying the employee $680, the business paid him $11,000 for 680 hours of work. When the error was discovered, the employer asked for the money back. However, the employee refused to return it, saying he thought it was a signing bonus and had spent it.

Even though this started out as a mistake, the employee seems to have ultimately acted dishonestly in order to gain financial benefit and cause the employer financial loss. However, the insurance company is raising questions about coverage because the payment was in the form of wages. Do you think there is coverage for this loss under the employee dishonesty form?

Kansas Subscriber