Crime Insurance (Fraud / Fidelity)
Employees and Directors have stolen and committed fraud against their employers since business began. Fortunately, it’s only a minority who turn bad, but there are many reasons why they do.
Often the usual financial pressures of life lead to such actions such as debt, divorce, impending retirement or redundancy or simply management resentment, although too often it’s a result of addiction to drink, drugs or gambling. In poor economic times such risks are increased.
Unfortunately, the truth is that it may be the most trusted and senior staff who have the knowledge to skirt round security and set up insidious, well-concealed fraud systems.
It’s often a pattern repeated over years; sometimes on their own, sometimes in collusion with outsiders such as suppliers.
Theft of stock/contents is generally excluded from standard business theft insurance policies, hence Crime Insurance is often required where high value goods could be taken by employees: for example theft of copper cut-offs or portable electronic goods are easily achieved, but can be very costly.
Fraud can impact the business beyond the money or stock that’s been taken. In addition to the basis employee theft/fraud cover, insurers now tend to extend to include other covers such as third party computer fraud and fund transfer fraud etc.
It can also be extremely hard to establish how much has actually been taken. Fraud investigation is a specialised field, especially when the period the crime took place over dates back a long time. It’s a job best handled by experts, even without considering the sensitivities of having to investigate your own staff.