preventing_employee_theft

Preventing Employee Theft

preventing_employee_theftPreventing Employee Theft is a Big Deal for Small Businesses

October is National Crime Prevention Month.  With that comes a renewed appreciation for having the correct insurance policy in place that will reduce devastation in the event of an employee theft.

All businesses have some exposure to employee theft, but according to the Association of Certified Fraud Examiners (ACFE), companies with fewer than 100 employees disproportionately bear the brunt of this problem.  Any organization that fails to protect itself appropriately faces increased vulnerability to fraud.

Top Five Employee Crime Schemes

Based on an in-depth study of one of our carriers, The Hanover identified these five common employee-related crimes (summarized by the Independent Agent Magazine):

  1. Billing and vendor schemes: employees set up false vendor accounts and then bill their companies for non-existent parts or services
  2. Check tampering schemes: employees use company checks to pay themselves, or reissue the company’s old outstanding checks and change the payee to themselves
  3. Payroll schemes: employees create “ghost” employees, add them to the payroll and direct-deposit their salaries into a fraudulent account they set up; or, employees fraudulently increase their salaries within payroll or HR systems, triggering payments in excess of their actual salaries
  4. Expense reimbursement schemes: employees submit reimbursement requests for expenses never incurred or not of a business nature, and are then reimbursed for those fraudulent expenses
  5. Social engineering schemes: one of the most prominent types of losses to impact companies within the past 20 years, these schemes intentionally mislead unsuspecting employees to send money or divert payments to impostors who impersonate vendors, clients, customers, senior executives or business owners

How to Prepare, Prevent, and Protect Your Business from Employee Theft

Know what to expect so you will know how to deal with the issues before they arise.  Whether you’re operating a small business or a multi-million dollar business, you are vulnerable to fraud.  Get adequate controls in place to prevent it from ruining your business.  You can test your company’s fraud health with a free training guide and video from the ACFE.  Find out where the weaknesses are before they become a reality check!

Speak with an agent to make sure you have proper insurance coverage in place. Call us direct: 517.787.2600 or contact us online.





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