Identity theft insurance offers some compensation for the out-of-pocket costs of restoring a credit rating and cleaning up any judgments acquired by someone who has stolen an employee’s identity. Some plans also offer prevention programs and counseling assistance in cleaning up credit. The insurance can be either a voluntary program or a fringe benefit.

What does it cover? The advantages of such insurance include:

• reimbursement for lost wages for time taken off work;
• reimbursement for long distance telephone calls, postage, and notary fees used to restore credit;
• coverage for attorney fees to undo judgments entered against the victim, and criminal records incurred by thieves;
• information on preventing identity theft; and
• the assistance of a counselor to advise victims on how to go about restoring their credit rating.

What should my company consider in offering such a benefit?

• The usual out-of-pocket costs of identity theft are small.
• The time spent restoring the credit rating and dealing with other issues can be significant for both employer and employee.
• Much identity theft is committed by relatives; yet many policies exclude such theft from coverage.

Employees usually like the idea of identity theft insurance, and the cost to the employer is quite small. Since the major loss in the event of an identity theft is lost time, plans that include a counselor to guide victims through the process of restoring their credit can benefit both employer and employee alike. You should also be certain that the policy your company offers does not exclude coverage for identity theft committed by relatives or co-workers.