What is Fidelity Insurance?
Fidelity insurance protects organizations from loss of money, securities, or inventory resulting from crime. Common Fidelity claims allege employee dishonesty, embezzlement, forgery, robbery, safe burglary, computer fraud, wire transfer fraud, counterfeiting, and other criminal acts.
These schemes involve every possible angle, taking advantage of any potential weakness in your company’s financial controls. From fictitious employees, dummy accounts payable, non-existent suppliers to outright theft of money, securities and property. Fraud and embezzlement in the workplace is on the rise, occurring in even the best work environments.
Liabilities covered by crime insurance usually fall into two categories, although many polices combine both types of coverage:
* money and security coverage pays for money and securities taken by burglary, robbery, theft, disappearance and destruction.
* employee dishonesty coverage pays for losses caused by most dishonest acts of your employees, such as embezzlement and theft
When do I Fidelity Insurance?
Any business employer needs to be concerned with Employee Dishonesty or any business handing cash or securities needs protection from robbery or theft will need Fidelity.
Because crime-related losses are not typically covered by most property insurance policies, crime protection insurance is a necessary component for any business. Unfortunately, the majority of businesses don't purchase enough crime protection.
If yours is like the average U.S. business, you can expect to lose 6 percent of your total annual revenues to employee fraud.
According to a recent study by the Association of Certified Fraud Examiners (ACFE). It estimates the average business is losing six percent of its total annual revenue from losses involving employees — on average more than $9 per day per employee.
For an organization with 40 employees, with 250 workdays in a year, this could amount to as much as $90,000 off its bottom line.
Add to this other crimes such as robbery and burglary, where small operations are especially likely to be victims, losing at least 20 times more than large corporations. In fact, shoplifting, robbery and burglary put such a disproportionate strain on small firms that many disintegrate as a result.
Why do I need Fidelity Insurance?
Fraud and embezzlement in the workplace is on the rise, occurring in even the best work environments. According to a leading international accounting firm:
* 80% of workplace crime is carried out by employees
* One in four employees has either committed or witnessed workplace fraud and abuse
* One in four employees committing fraud against their employer has been with the company for more than 10 years
* Only one in three of those who have witnessed a workplace crime bother to report it
The Association of Certified Fraud Examiners has found that:
* Fraud and abuse costs U.S. businesses more than $400 billion annually
* Fraud and abuse costs employers an average of $9 a day per employee
* The average organization loses 6% of its total annual revenue to fraud and abuse committed by its own employees
These frauds can go on for years, and when discovered the ultimate impact can be enormous. Smaller companies are especially vulnerable to Fidelity crimes.
Most business insurance policies either exclude or provide only nominal amounts of coverage for loss of money and securities as well as employee dishonesty exposures.
The American Management Association has estimated that employee dishonesty causes as much as 20% of the nation's business failures.
White collar crime can have serious financial consequences, even threatening a private company’s survival. InsureHedge offers a solution to handling crime losses committed by employees, through ForeFront Crime Liability Insurance Policy.
Typical Fidelity coverage highlights include:
Comprehensive coverage for:
* Employee theft
* Money and securities while on premises or in transit
* Funds transfer fraud
* Computer fraud
* Money order and counterfeit currency fraud
* Credit card fraud
* Optional client coverage
* Coverage for investigative costs for covered losses
* Broad definition of employee, including directors and officers; employees, including part-time, leased, temporary, and seasonal employees; and volunteers.
* Worldwide coverage.
Actual coverage is subject to the language of the policies as issued.
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