Commercial Crime Insurance: A Necessity for Your Clients
As your clients are aware, employee crime accounts for the most loss suffered by companies each year. Although unfortunate, this type of illegal activity results in massive property loss and reputational damage. What’s more, there are various types of fraudulent activities that each client should be aware of. In order to mitigate these risks, is it paramount to carry Commercial Crime Insurance. The following are the top four ways in which companies suffer loss each year.
Forgery or Alteration- Forged financial documents such as checks and invoices are a common source of financial loss. In addition, altered figures and bogus invoices can lead to stolen money without immediately being noticed by management. Experts recommend implementing a system of multiple people to handle the finances within a company so as to deter such activity. For example, Mark Doyle, president of Jack L. Hayes, states “Always have funds and voids witnessed by a second employee or a manager. Rotate the employees paired together and avoid having close friends witness transactions for each other.”
Money & Property Theft- This includes employees and outside parties who cause damage or steal from businesses, whether it is physical items, money, or confidential information.
Cyber Fraud- The illegal use of computers, hacking, and stealing of company records is one of the fastest growing forms of commercial crime. This includes fraudulent activity on and off the premises, as well. What’s more, any loss resulting from the transfer of property from inside the business is a large cause of loss.
Customer Property- In the unfortunate event of a data breach and customer information is compromised, the company is held liable for quickly notifying the employee, paying any legal damages, and securing the network’s system. These costs incurred by the business quickly add up, resulting in hefty fines and financial loss.
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