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Fidelity Insurance - Employee Dishonesty & Crime Insurance

Crime Insurance Insight  |  Also Known As ‘Fidelity’ Or ‘Employee Dishonesty’ Insurance

Regardless of size, every organization is a potential target for crime. Experts acknowledge that crime is among the fastest-growing and most prevalent problems facing businesses today. In fact, research shows that in the past 3 years, 21% of surveyed organizations experienced some form of employee fraud. Examples of real Canadian crime insurance claims include:

  • An employee steals property and cash from their employer
  • A controller confesses to writing company cheques to himself totaling more than $90,000
  • Over several years, the bookkeeper of a small plastics manufacturer issues approximately $100,000 in company cheques payable to a shell company that she created

Crime insurance is specifically designed to reimburse organizations for the loss of money, securities, or inventory resulting from crime. The constantly changing economic environment, advancements in technology and international expansion make the threat of crime-related losses more ominous than ever before.

Loss Scenarios That Crime Insurance Can Address
Employee-related and third party theft can happen in an instant or over a period of months or years. Some examples of potential loss scenarios that a crime policy can cover are noted below.

  • Employee Theft – Money, securities and other property due to employee theft or forgery.
  • Premises – Destruction, disappearance or abstraction of money and securities within or from the insured’s premises by third parties.
  • In Transit – Destruction, disappearance or abstraction of money and securities outside the insured’s premises by a third party, while being conveyed by the insured or any authorized person.
  • Forgery – Losses resulting from instruments that were fraudulently drawn upon the insured’s accounts by a third party.
  • Computer Fraud – The unlawful taking or fraudulently induced transfer of money, securities or property through the use by a third party of a computer network and facilities either owned and operated or leased and operated by the insured.
  • Funds Transfer Fraud – Fraudulent instructions issued to an financial institution by a third party directing them to transfer or pay or deliver money or securities from the insured’s bank account without the insured’s knowledge and consent.
  • Counterfeit Currency Fraud – The insured accepts in good faith and in the ordinary course of business either counterfeit currency or a postal or money order supposedly issued by the post office but not paid upon presentation.
  • Credit Card Fraud – The forgery or alteration of any written instruction by a third party, required in connection with any credit card issued to an insured to any employee or partner of an insured that is a partnership.
  • Client – Losses sustained by a client resulting from theft, fraud or dishonesty by an employee who is not in collusion with the client’s directors or employees.
  • Expense – Investigative costs or computer violation expenses incurred in establishing the existence and amount of any direct loss in excess of the deductible.

Preventative measures can include reviewing internal controls, inventory management/protection protocols as well as a crime insurance policy.

ALIGNED Crime / Fidelity Insurance  |  1-866-287-0448
Our advocates can help ensure that together with a comprehensive risk management program, your crime insurance will be structured to address many potential loss scenarios.

Source: IRMI

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