Every business risks fraud or criminal abuse, making crime & fidelity insurance a vital safeguard for you to have in the event of a disaster. A standard business liability policy doesn’t address fraud risks from employee dishonesty or external threats of credit card forgery. Therefore, you need an alternative plan to cover any liability. In addition to having the proper insurance, fraud prevention strategies can help mitigate your business’s financial and reputational threats.
Tips to Prevent Fraud Claims on Your Crime and Fidelity Insurance
There is approximately 57% of business fraud that takes place on account of employee actions. While there is also an external threat, undetected internal issues can ruin your business with both reputational and revenue loss. These tips can help you develop a crime prevention strategy for your business.
Learn Your Employees’ Behaviors
Fraud perpetrators tend to reveal their intentions through specific behavioral traits. You can better identify fraud risks by continually walking around and getting to know your employees. Changes in attitude are a clue to crime & fidelity issues, as are significant life changes that would require a sudden need for more financial support. Potential signs of taking note include hearing employees talk about new medical expenses, major purchases, or unhappiness over a work situation.
Establish Internal Controls
You should implement programs and processes to guard your company’s assets. Segregating duties can maintain integrity with accounting records and the exchange of money. Establish transparency with financial transactions, whether it’s a stamp on incoming checks or the need for two signatures on outgoing checks.
Educate Employees
Educating your employees about your fraud prevention strategies and the consequences of committing fraud goes a long way in protecting against crime & fidelity insurance claims. Teach awareness and encourage your team members that fraud prevention is everyone’s responsibility. Ensure your employee handbook clearly outlines the processes that prevent fraud and the potential consequences when an incident occurs.
Work With Trusted Experts
The professionals that work with your company have an active part in preventing fraud in your business. It includes Certified Fraud Examiners and Certified Public Accountants, though any external professional could create a situation of fraud. Anyone working with sensitive financial information should have verifiable experiences and reputations in being trustworthy and confidential.
Review Vacation Balances
Employees who never miss work could have something to hide. While they could also be loyal to the company, it’s a good practice to routinely check vacation balances or sick days and see who is coming or going. You can also rotate employees around to different tasks as a peer form of activity review.
Build a Positive Corporate Culture
Maintaining an organized structure with transparent procedures, written policies, and fair employment practices creates a positive atmosphere for employees. Create an open-door policy and do your best to encourage employees to communicate with management. It’s a simple but effective way to prevent crime and fidelity risks.
Your Protection With Crime & Fidelity Insurance
Protecting your company against the risks that could lead to claims on your crime & fidelity insurance is essential. These tips are a good foundation for protecting your company’s internal threats.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.
