How Does Your Company Handle Damaged Devices Without Insurance Coverage?

Hi, I want to inquire about the Company Assets policy in your organization. If you issue an electronic device—laptop, PDA, mobile—to any employee and they damage the equipment, what policy do you apply if you don't have insurance coverage for that? Do you charge them fully? Is the user fully responsible for that?

Thank you.

You should have considered the possibility of damage, theft, or loss of the company's property well before allocating it to the individual, not after. It would not be fair to recover the entire amount. Anyway, conduct the inquiry. Let the culpability of the employee for damage or loss be established. Then decide how much percent to recover. Please take into account the depreciation of the item as well.

Policy on Allocation of Company Property

For creating a policy on the allocation of company property to employees, you may refer to my previous responses at the following links:
- https://www.citehr.com/336602-policy...ml#post1544266
- https://www.citehr.com/375356-ex-emp...ml#post1725508

Regards,
Dinesh V Divekar
[Phone Number Removed For Privacy Reasons]

Thank you for your comments, Mr. Dinesh. I have been working here in Saudi Arabia since 2011, and in many companies, I have found the same problem. Usually, in Saudi Arabia, the owner refuses to accept any excuse and simply deducts the whole price from the employee. As there is no concept of tax here, similarly, there is no concept of depreciation.

Responsibility for Damaged Equipment

The general rule followed by companies is that if the equipment is damaged while in the custody of the employee, the employee is responsible for the loss. No loss is attributed to the employee if the damage is due to an unaccounted accident that was beyond the employee's control or where they have taken normal precautions to prevent it. Therefore, it is sensible to have insurance coverage.

There is no law governing this, so each company makes its own rules. However, most countries require adherence to the doctrine of equity and natural justice, which means being fair and giving the person an opportunity to explain.

In terms of the value of the loss, the market value of the asset would be considered, not the original cost. Again, it's up to the company to decide what it wants to do, but it should have notified the employees of this well in advance.

That said, I have recently seen a case where Kuoni Travels (a company owned by the Swiss government) deducted the cost of repairing a laptop (normal wear and tear in 2 years of use) from an employee when he was leaving. So mostly, you are at the mercy of the employer.

Thank you for the comments. Well, we have prepared a depreciation policy and an Acceptable Use policy. I hope they will help our company to cope with such problems.