March 27, 2017
On a proven employee theft where the employee bookkeeper entered fraudulent payroll or commissions which the employer paid until discovery of the scheme, would the payroll taxes and social security contributions made on the fraudulent portion be considered a DIRECT LOSS as opposed to an INDIRECT LOSS and therefore be covered as part of the claim under the standard employee theft policy? We have an issue with an insurance carrier who is treating the payroll taxes and social security contributions as an indirect loss and is excluding them saying they will only pay the “net” loss which is the net amount on the employee's payroll check. Please advise.
New York Subscriber
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