Fidelity Guarantee Insurance (Theft by Employee)
From theft to rogue trading, internal fraud is a growing problem - and SMEs are not immune.
According to a survey by independent fraud prevention service Cifas, UK internal fraud rose by 18% in 2014. The frauds range from theft by staff to account fraud.
How can you protect your business against internal fraud?
1 Institute an internal audit system for all financial records.
2 Have an independent accountant perform a full audit annually.
3 Make sure that bank accounts are reconciled by someone other than those who handle deposits and withdrawals.
4 Have countersignature procedures for checks.
5 Make sure there is joint handling of any securities.
6 Have strict security procedures for all computer operations.
7 Institute formal management procedures.
8 Institute a formal employment policy for hiring new employees.
9 Purchase Fidelity Guarantee Insurance
What is Fidelity Guarantee insurance?
This is cover which protects your organisation against the loss of money and/or property which you may suffer as a result of a dishonest or fraudulent act by an employee or volunteer. Fidelity Guarantee insurance can also be known as Employee Dishonesty cover.
A Treasurer (volunteer or employed) is found to have taken funds for her own use. This is subsequently discovered in an audit and the organisation is unable to recover the money from the individual.
Who needs Fidelity Guarantee insurance?
Any organisation which believes that there is a risk that a dishonest person could take funds or property, and that such a loss would put the financial stability or reputation of the business in jeopardy.
What does it cover?
The loss of cash, money or property which your organisation owns or is responsible for, as a result of an employee or volunteer acting dishonestly. Also covered are the additional costs you may incur through auditors fees which are needed to investigate the fraud or theft.
The policy that Mitchell Charlesworth Insurance Solutions can offer you also includes the following additional covers:
- Third party computer fraud
- Funds transfer fraud
- The reconstitution costs for rewriting or amending software following the fraudulent use of computer or hardware.
What doesn't it cover?
The policy will have specific exclusions which Mitchell Charlesworth Insurance Solutions will be able to discuss with you in more detail. These can include acts of theft or fraud by Agency staff or staff who haven’t had their references checked.
For further information, please contact a member of our Insurance Team to the right of this page.
Mitchell Charlesworth Insurance Solutions Ltd is registered in England and Wales no. 7002662 and is authorised and regulated by the Financial Conduct Authority.