What is fidelity insurance?
Having a need for fidelity insurance may sound outlandish at first, but the harsh reality is that nearly every business is eventually victimized by fraud or theft. In this day and age, thieves (including your employees) do not need direct access to cash to steal from you; merchandise, supplies, and securities are all fair game. Different types of fidelity insurance can protect against such losses. You may also be susceptible to losses in the event that finished products or even raw materials are stolen right from under your nose. Essentially, any product can be a target for thieves if there is an opportunity to make a resale profit.
Real Canadian Fidelity Insurance Claims:
- Employee steals property and cash from employer
- Controller confesses to writing company cheques to himself totaling over $90,000
- The office bookkeeper of a small plastics manufacturer issued cheques payable to a shell company (she created) from company funds of approximately $100,000 over a period of 3 years
Standard property and inland marine insurance policies might offer some protection against criminal acts, but they typically fall short when addressing losses due to employee dishonesty. That’s where fidelity insurance, often termed fidelity guarantee insurance, comes into play. This type of insurance is specifically designed to bridge the gap, ensuring businesses are safeguarded against fraudulent activities committed by their employees.
Fidelity Insurance Exposure
While large companies often garner more attention due to the larger scale of in-house crime, smaller companies might actually be more vulnerable to employee theft. Smaller companies tend to have fewer anti-fraud measures and internal controls in place, increasing their susceptibility to incidents of crime. As a protective measure, many consider burglary insurance in addition to fidelity insurance to further safeguard their assets.
The Importance of Comprehensive Coverage
No matter the size of your company, employee crime remains a very real possibility, which is why it’s important to take steps to insure your business against losses with Fidelity Insurance and other risk management strategies.