Coverage In Action: Crime Insurance
August 13, 2019
As a leader within your organization, you want to trust your employees, the general public and the people you do business with. However, the reality is that no business is immune to the threat of crime and fraud. In fact, the Association of Certified Fraud Examiners estimates that a business can expect to lose 5% of its revenue to fraud each year.
Even if your organization takes the necessary precautions, you could still end up the victim of employee fraud and similar crimes. The only way to ensure your company has the protection it needs is through crime insurance. To discuss your unique risks and to learn more about crime insurance policies, contact Watkins Insurance Group today.
Click the image below for a short video about Crime Insurance.
Claims Scenario: Check Please
The company: A retail company specializing in consumer goods.
The challenge: Crime and fraud can affect businesses from many directions. Worse still, organizations can fall victim to these malicious acts due to the actions of employees themselves.
The vice president of finance at a national retail company created false vendor invoices. Simply by altering checks, the employee was able to embezzle $1.2 million over a 10-year span. As you can see, scams like these can persist for years, and many organizations don’t catch on until it’s too late.
Crime insurance in action: Simply put, any employee that has access to checks or financial information represents a crime and fraud exposure. Even directors, officers and other high-ranking officials pose a threat to a company’s bottom line.
Crime insurance can help organizations recover from the financial impact of fraudulent acts and the misuse of funds. What’s more, crime insurance can provide coverage from a variety of expenses related to business interruptions, recovering data, stolen funds and forensics.
Claims Scenario: The Phish are Biting
The company: A design firm with minimal IT security.
The challenge: A design firm that uses their computer systems to store build files and other intellectual property was recently the target of a phishing attack. The firm received an email from their bank, advising them of a new security program.
One of the company’s employees opened the email, which infected the firm’s network with malware. From there, cyber criminals were able to obtain the insured’s banking and password information and initiate a fraudulent electronic wire transfer. In total, the hackers’ actions cost the organization nearly $700,000.
Crime insurance in action: Computers and emerging technologies have made it easier than ever for employees to carry out crimes against their employers. Crime insurance can provide a crucial layer of protection for any money or securities lost via computer fraud, which is an important piece to an effective cyber risk management program.
This is especially important when you consider that attacks like the one described above are increasing in popularity. Without the proper protection and coverage, businesses could have all of their assets drained with little to no recourse.