Staffing Agency Crime Insurance: Protecting Trade Secrets
As with any other type of business, staffing agencies are exposed to employee crime risks, referred to as white-collar crime. White-collar crime is typically a financially motivated non-violent crime that is committed by business professionals. Some types of crimes that this can refer to are fraud, bribery, embezzlement, cybercrime, and copyright infringement. One more very common type of white-collar crime is insider trading, when a person uses inside, confidential, or advance information to trade for a monetary reward. With staffing agency crime insurance, both your clients and theirs can be protected financially should a theft of trade secrets occur. However, how can they protect their trade secrets to begin with?
Some companies, such as Coca-Cola, take extraordinary measures to protect their trade secrets. Coca-Cola’s formula is kept locked in a bank vault that can be opened only by a resolution of the company’s board of directors. Only two of the company’s employees ever know the formula at the same time and their identities are never disclosed to the public. Of course, Coca-Cola’s methods may not be practical for other types of businesses. According to law reference website Nolo.com, the best way to protect trade secrets is through use of nondisclosure agreements. Courts have reiterated that the use of nondisclosure agreements is the most important way to maintain the secrecy of confidential information.
Stealing trade secrets is considered a crime under both federal and state laws. If this crime occurs against a staffing agency or against their client, the trade secret owner can enforce rights against the person who has stolen the confidential information by asking a court to issue an order preventing further disclosure or use of the secrets. The trade secret owner must be able to show that the information alleged to be confidential provides a competitive advantage and that the information really is maintained in secrecy. Finally, the trade secret owner must show that the information was either improperly acquired by the defendant or improperly disclosed by the defendant.
At World Wide Specialty Programs, we understand how important it is for businesses to protect their intellectual property. We offer Staffing Agency Crime Insurance Coverage to both 1st and 3rd parties, protecting the insured and their client from dishonest acts committed by the insured’s employees. This includes defense and legal liability, coverage for theft of trade secrets, along with expenses from a security breach. Please contact us today for more information about this coverage as well as our other Staffing Agency Policies at (877) 256-0468.