Onsite massages and doggie day care were nice benefits during the dotcom days, but what perks can cash-strapped companies provide for their stressed-out employees today? Insurance companies, including AIG American General and St. Paul Travelers, are now selling identity theft policies to employers to offer as a benefit.
Given the time and money it can take for victims to resolve ID theft issues, it can become a personnel problem. According to the “2005 Identity Fraud Survey Report” conducted by Javelin Strategy & Research, the 9.3 million adult Americans who were victims of ID theft in 2004 each spent an average of US$750 and 28 hours to resolve issues related to ID theft.
Enter identity theft insurance as employee benefit. St. Paul Travelers has been offering identity theft coverage since 1999. According to Joe Lester, the company’s identity theft product manager, ID theft coverage was first offered as an endorsement to personal homeowner’s insurance. Insured employees are reimbursed for certain types of expenses that they may incur while trying to fix their credit. Such expenses include attorney’s fees, lost wages, long-distance phone calls made to clear up credit card fraud, certified mail postage and notary fees.
The policy also covers costs related to wrongful incarceration that results from an ID theft. “If you get pulled over because you don’t make a complete stop at a stop sign, and you get arrested and taken to jail because a known drug dealer has stolen and is using your identity, ID insurance will reimburse any costs associated with that,” says Lester.
Similar to St. Paul Travelers’ policy, AIG American General’s Identity Guard insurance reimburses expenses incurred by ID theft victims and provides support services, including access to credit specialists and copies of sample dispute letters.
As for what employers can expect to spend, Lester says the average ID theft policy costs companies anywhere from a few cents to about $2 annually per employee. Since offering the coverage to employers, Lester says business has been good.
While that bodes well for the insurance business, it offers a sad commentary about the state of our identities.