Why Take Out Employee Fraud Insurance?
Posted on: 12 August 2019
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You may run all of your employees through stringent checks before you hire them; however, this is no guarantee against fraud in the future. If one of your employees commits a fraudulent act against your company, then you could be left with a big mess on your hands.
Fraud insurance coverage helps deal with these situations. It protects your company against fraudulent acts. Why should you consider adding it to your business insurance?
You Can't Cover All Eventualities
You may already have taken some steps to avoid internal fraud. For example, your pre-employment screens and background checks give you some peace of mind that your employees are honest and reliable.
You may even have built anti-fraud measures into some of your internal processes. For example, you may have set up multiple approval sign-offs for money movement or purchases. This means that nobody can access company finances alone; they need at least one other person to do this.
However, you may not have been able to stop all the gaps, even if you have anti-fraud policies in place. If an employee spots an opportunity to defraud the company that you don't know about, then a dishonest person may take advantage of the opportunity. You can't protect against things that might happen if you don't know about them. Sometimes, you only see gaps after they have been breached.
You May Lose Money
If one of your employees defrauds your company, then you may not get the money back. The employee may disappear with your money and you may not be able to track them down. Even if you do catch the culprit in the act, it may be too late. You can prosecute a fraudster; they may even go to jail. However, you may not get back the money they stole.
If they have spent it already and don't have the resources to pay you back, they may be ordered by courts to pay you back in small sums that could take years to put things right. While you'll get some satisfaction if they are caught, you may have to handle the loss on your own.
If you add employee fraud cover to your business insurance, then you get an additional layer of protection on top of the measures you already take. You also get financial recompense if you do lose money that you can't recover.
For more information on how this kind of insurance works and whether it's worth having, contact a business like Austwide Insurance Brokers.