In which scenario would a business be compensated under employee theft coverage?

Employee theft coverage is specifically designed to protect businesses from losses incurred due to dishonest acts by their employees, including theft of property. When an employee steals office supplies, this theft clearly falls under the purview of employee theft coverage, as it involves a breach of trust and integrity by an individual who has access to the company's property by virtue of their employment.

In contrast, the other scenarios do not involve employee misconduct. An appliance malfunction is a matter of equipment failure, which would typically be covered under a different type of insurance, possibly a property or equipment breakdown policy. Damage caused by hired contractors is related to liabilities arising from services performed by third-party vendors, which would fall under general liability insurance rather than employee theft. Lastly, when a theft occurs without any employee involvement, such incidents would usually be covered by commercial property insurance but not by employee theft coverage, which is meant to address losses specifically linked to employees' actions.

This focus on the responsibilities and the trust endowed to employees is crucial in understanding why employee theft coverage is relevant in protecting businesses against internal risks, such as stealing office supplies.