No matter how much you might trust your staff, employee fraud is a real threat regardless of your industry. Unfortunately, no business is exempt and all employers should take proper precautions. Many small to medium-sized business are often most at risk because the relationships between staff and management are often closer and less formal than larger corporations. This makes it easier for those looking for an opportunity to seize it and take advantage of the trust and respect they’ve gained. This makes fidelity insurance an important cover for any business.
The truth is, if you employ staff, you’re at risk. With incidents of fraud at the hands of employees on the rise, a policy like fidelity insurance cannot be overlooked. Before you can take the necessary steps to implement a cover like this one, here’s what you should know about it.
What is it exactly?
In a nutshell, it is Insurance against fraud or theft that might occur at the hands of your employees. It also acts as embezzlement insurance too. Any costs incurred through forgery and fraudulent acts will be covered by this policy, which protects business owners from the losses associated with such dishonesty. Whether the loss is monetary or in terms of important goods, you will be compensated. Although many policies will only cover a direct financial loss and not one that stems as a consequence of the employee’s behaviour.
What should you remember?
- Theft has to be committed by an employee
This means that the guilty party needs to receive a salary each month. If you are currently employing non-salaried workers, you will need to inform your broker that your policy needs to accommodate this as well.
- Is the person a high-risk employee?
Someone would be considered high-risk if they had been the reason for the cancellation of fidelity cover at a previous job. Depending on your policy, this could render your claim invalid. We suggest speaking to your broker for more details on your specific cover.
How can you lessen the chances of employee fraud?
- Have the right policies in place
Fidelity cover aside, you need internal processes that detail what will happen in the event of fraud and theft. You should also inform employees that regular checks and audits will be conducted and if there are any breaches, legal action will be taken. Issuing a clear code of conduct is also vital to help staff learn what will and won’t be tolerated.
- Set up a platform for anonymous tips
Most of the time, you can easily find out what’s happening at work from those close to the guilty party. People are less likely to report others if they know they could be implicated afterwards. This makes anonymous tips a good way to gain insights without creating accessories to the issue. Whether it’s a sealed box or an anonymous email account, it’s worth setting up. Treat every report as serious but do not pass any judgement until it has been properly investigated.
- Be clear on management’s position on fraud
Communication is key, especially when it comes to matters like employee misconduct. Make it clear that this is not tolerated and that any fraud or theft will be dealt with swiftly. When your staff are aware of this and believe that you won’t allow it to happen, they’ll be far less likely to do anything sinister.
- Conduct the checks you claimed you would do
Maintain your credibility and your peace of mind by performing informal audits on a regular basis. Get a provider in who is an external company. This will lead to non-biased, accurate results. Scheduling them as unannounced audits will give guilty staff less time to clean up their mess.
Your business deserves cover that eliminates every risk. It’s why Compendium offers a host of products that deliver priceless peace of mind. If you’re a business owner, why not get in touch with us today? With a clear understanding of what entities need in the modern age, our brokers are knowledgeable and ready to help you safeguard your legacy. To find out more about our business products, please click here. https://www.cig.co.za/business-insurance.aspx To speak to a member of our team and get a quote, please call us now on 079 5244 579.