Fidelity Insurance, Crime Insurance

Crime & Fidelity Insurance

Prevent, detect & respond

White collar crime is an unfortunate but indisputable business reality, and industry-based research continues to show that it is on the rise. It is the great ‘sleeping giant’ of the corporate sector. Why? Because many frauds go undetected for long periods of time, only to emerge years after the act was first perpetuated.

Many dismiss crime and fidelity insurance as a ‘luxury’ they cannot afford. But the impacts can be profound – and can even lead to business failures. Smaller companies are especially vulnerable to fidelity crimes. It’s only when these mysterious activities rises to the surface that companies understand the true necessity of crime insurance.

The facts behind workplace crime

In 42% of major frauds in Australia, none of the money or goods are recovered. The average loss value sits at $714,000 and the average recovery time from such a loss is a massive 300-400 days. 17% involve computers, computer networks or online banking facilities.

Common frauds: false invoicing, theft of cash and inventory, payroll fraud, computer fraud.
Target industries: financial institutions continue to be an attractive target for fraudsters. These frauds get more sophisticated by the day, particularly through rapid technological expansion which presents ever-changing opportunities and methods for computer criminals.
Motivations: greed and lifestyle considerations, together with gambling, are the most common motivators of fraud.
Perpetrators: Most frauds are perpetrated by employees – usually long-term employees of 5 years service or more. Poor internal controls and management override of controls along with collusion between employees and management or with external parties are all significant factors allowing frauds to occur.

Dealing with fraud: A holistic approach

Only a holistic approach to fraud risk management – prevention, detection and response - can substantially reduce fraud losses. Despite strict internal controls around prevention and detection, organisations are never invulnerable to attack and must be able to recover losses through a responsive insurance program.

Any fidelity risk management program is incomplete without appropriate insurance protection. Crime-related losses are not typically covered by most property insurance policies and most business insurance policies either exclude or provide only nominal amounts of coverage for loss of money and securities as well as employee dishonesty exposures.

Your commercial risk partners

Insurance House is one of only a handful of insurers and brokers in Australia who fully understand the complexities of crime and fidelity insurance. Many insurers and brokers claim knowledge but most cannot deliver, whereas Insurance House has specialists on staff with many years’ experience recovering losses caused by fraud offenses on behalf of clients from many industries.

What’s more, if you take out crime insurance with Insurance House you will automatically register for our free support service, IH Business Assist. This includes:

• Service guarantee including a dedicated Account Manager and Support Team
• Financial analysis services
• Formal review processes for a range of business risks
• A range of other support services including claims analysis and consulting, valuations, access to our online knowledge bank and subscription to our quarterly newsletter.