Update Blog of Payroll Firm Steals Tax Payments
I just received an email from someone who had been the victim of their payroll Firm stealing their tax payments in another state. He was lucky enough to have a Business Owners Insurance Policy commonly known as a BOP and may have some coverage under Theft or the Money & Securities coverage. When considering using a payroll tax service other than ADP or Paychex, you need to do some research into the financial strength of that company.
Here are some steps you should take:
- Look them up in the Better Business Bureau. Better yet, many jurisdictions easily allow you to check online to see what lawsuits have been filed against a business.
- Ask the payroll tax company to have THEIR insurance agent send YOU are certificate of Insurance showing you exactly what coverage they have.
- Ask whether they have a “Fidelity Bond” which covers employee theft and whether it has First Party Coverage for the owners of the Tax Service as well. Sadly enough, it’s usually the owners committing these fraud cases rather than employee.
- Lastly , make sure they have a LARGE Fidelity Bond, say $500,000 or at least $1,000,000. If they are handling $1,000,000 in payroll a month and only have a $25,000 Fidelity Bond, then they do NOT have enough coverage. Why you ask? Because in the event of a large claim, every claimant would share their proportional loss of the $25,000 Fidelity Bond… So the larger the bond, the better.
Have a question, Contact Steve Luray at 410-602-2636