Crime

Contrary to popular belief, crime insurance is not just for large companies. Theft, fraud, embezzlement, burglary and the like could happen to any form of business of any size. Therefore, you might want to rethink about not purchasing crime insurance.

Crime insurance covers you from crime-related losses, a clause not covered by most business property insurance. No amount of internal control can guarantee employee loyalty and honesty. Even with the soundest internal control in place, your company’s financial assets are still expose to a certain level of risk within the organization. Commercial crime insurance can act as reinforcement to your risk management program and shield you from potential losses resulting from employee dishonesty-related criminal act.

According to the Association of Certified Fraud Examiners (ACFE), a “typical organization loses 5% of its annual revenues to occupational fraud and abuse.” Left alone, this annual loss will add up to a hefty amount that will cost the company even more down the road. If you are a small business owner, you should be even more wary about the risks involved with employee dishonesty. The ACFE found that “small businesses are particularly vulnerable to fraud” because they have far less controls in place.

There might be some red flags that you can observe from the potential perpetrators at your company. However, according to ACFE, “85% of fraudsters... had never been previously charged or convicted for similar offense” and “one in four fraud cases were committed by employees who have been with the company for ten or more years…”

Conclusion is, prevention (having the right crime insurance and effective internal control program in place) is BETTER than cure.