Employee dishonesty insurance is a distinct business insurance category that covers losses caused by employee theft or fraud, according to business.gov.au’s Types of business insurance guidance. The guidance does not publish a standard policy limit, excess or premium, so no general amount should be assumed; those figures must be checked in the policy’s PDS. Figures checked 1 October 2026.
What does employee dishonesty insurance actually cover?
The cited guidance provides a straightforward connection between the conduct, the resulting loss and the policy’s purpose:
| Element | What the guidance identifies |
|---|---|
| Conduct | Employee theft or fraud |
| Resulting event | A loss to the business caused by that conduct |
| Purpose | To cover the business for the loss |
That description explains the category’s purpose, but it is not a complete set of policy terms. The guidance does not define every action that could constitute theft or fraud, identify covered employees or list policy exclusions. Those details depend on the wording of the particular policy.
How is it different from burglary or management liability insurance?
Employee dishonesty insurance and burglary insurance can both relate to theft, but the cited guidance gives them different purposes:
| Insurance category | Purpose described by business.gov.au |
|---|---|
| Employee dishonesty insurance | Covers business losses caused by employee theft or fraud |
| Burglary insurance | Covers losses, damage and associated costs arising from a break-in or theft |
| Management liability insurance | Covers claims against directors, officers and managers arising from their management practices |
Management liability policies can also overlap with this subject. business.gov.au says most are available as packages that include employee theft or third-party crime. A small business should therefore compare the wording of each policy rather than relying only on its category name.
Is employee dishonesty insurance required by law?
The cited guidance does not identify employee dishonesty insurance as mandatory for every Australian small business. It explains that legal insurance requirements depend on the type of business, while some other insurance may be required by law or by the people a business deals with.
That does not rule out a specific contractual or industry-related requirement. Check the relevant regulator page, client requirements and the policy PDS for the business’s particular circumstances.
What should a small business check before choosing a policy?
- The definition of the conduct: Check how the PDS defines theft and fraud and which employees or workers it covers.
- The resulting loss: Check which business losses may follow from the defined conduct and whether any exclusions apply.
- Monetary terms: The cited guidance provides no standard limit, excess or premium figure. Confirm those amounts in the PDS and quote.
- Overlapping policies: Compare employee dishonesty cover with any employee theft protection included in a broader management liability policy, as well as burglary cover.
- Advice and credentials: business.gov.au advises discussing policy options with a broker or authorised insurer. It also says authorised general insurers can be found on the Australian Prudential Regulation Authority’s register, while an insurance broker’s licence can be checked on the Australian Securities and Investments Commission’s professional register.
This is general information, not financial or legal advice. Check the relevant regulator page and your policy’s PDS before making a decision.
Sources
FAQ
What is employee dishonesty insurance for?
It covers a business for losses caused by employee theft or fraud. The central issue is both the conduct and the business loss it causes.
Does employee dishonesty insurance cover every type of employee error?
The cited guidance does not say so. It identifies theft and fraud, but the PDS determines the precise conduct covered and any exclusions.
Is employee dishonesty insurance the same as burglary insurance?
No. The cited guidance presents burglary insurance as covering losses, damage and associated costs from a break-in or theft, while employee dishonesty insurance focuses on business losses caused by employee theft or fraud.
Is employee dishonesty insurance compulsory for every small business?
The cited guidance does not identify it as universally compulsory. Legal requirements depend on the type of business, and contractual or industry-specific requirements should also be checked.
Where can I find the limit, excess and exclusions?
Check the policy’s PDS and quote. The cited business.gov.au guidance does not provide standard monetary amounts or a complete list of exclusions.
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