What is Fidelity insurance?
Fidelity insurance protects businesses from loss of money, securities, or inventory resulting from crime. Fidelity claims can come from areas such as employee dishonesty, embezzlement, forgery, robbery, safe burglary, counterfeiting, and other criminal acts.
Why do I need Fidelity insurance?
Fraud and embezzlement in the workplace is on the rise, occurring in even the best work environments. Therefore any business employer should be concerned with Employee Dishonesty.
Employee fraud can occur whenever cash or goods are changing hands. The type of fraud committed depends on the nature of the business but typically it can involve any of the following:
- Voiding cash registers
- Theft of cash or materials
- Diverting cheques
- Fictitious invoices and suppliers
- Overstated billings
- Misuse of company assets
Also any business handing cash or securities needs protection from robbery or theft.
Because crime-related losses are not typically covered by most property insurance policies, crime protection insurance is a necessary component for any business.
Fidelity Insurance coverage can include:
- Employee theft
- Money and securities while on premises or in transit
- Computer fraud
- Money order and counterfeit currency fraud
- Credit card fraud
Examples of claims
Stock theft by employee
The employee had been working for the company for almost 20 years and was considered a trusted employee. He did not start perpetrating his fraud until the last six months of his employment. He had a senior position and was responsible for ordering stock. The type of stock ordered, however, was not monitored by his managers. The employee stole £50,000 of stock over a six month period.
Employee hides fraud behind specialised knowledge
A systems manager was working for a company for 10 years and stole property worth £100,000 during the last 7 years of his employment. The employee was responsible for ordering all IT equipment required for use by the company. The employers were impressed by the employee’s expertise and trusted him with the entire IT budget, without ensuring adequate controls were in place to record the type and amount of products ordered and whether they were accounted for on the premises. A colleague had become suspicious of the employee’s activities and eventually disclosed to management! Otherwise, the loss could have continued undetected for many years to come.
Internal gang uses stolen passwords to manipulate sales system
A computer company made a claim for £100,000 after it discovered a number of its employees, in collusion with a third party, had stolen 40 computers through sales at four regional department stores. By using other colleagues’ passwords to access the systems, the employees were able to raise fraudulent orders and issue fictional invoices. Delivery of the insured’s property was made to third parties without payment for several months. It was not until a fraudulent delivery was returned to the insured’s premises that the fraud was discovered.
To find out more about this cover and how we can help you ensure that your business is protected, please contact a member of our team on Nottingham (0115) 9420111.