You may believe that your company has everything in place to prevent fraud, but when it comes to occupational fraud and abuse, no business is safe. Fraud can happen in any organization, large or small, at any time, so it is important to have the right coverage.
Dee Studler, Certified Public Accountant and co-founder of SDC CPA, a global investigation and forensic accounting company, has been in this business for over a decade. In her experience, the best way to protect your business from costs incurred as a result of forgery, defalcation, embezzlement, and other fraudulent acts by employees, is through Fidelity Insurance.
In the past few years, Dee Studler has published and presented numerous articles and seminars on fidelity and crime topics to industry organizations and insurance company personnel.
The fidelity insurance policy is one of the most delicate in its management and administration, both by the insured and by the insurance company, however as Dee Studler explains, over 85% of the claims presented fail due to non-compliance by the affected party in the procedures and evidence to be submitted for consideration. Fidelity covers all kinds of damages that could be perpetrated against the interests of the policyholder or owner of the insurance, as long as the perpetrator of the crime is his employee, or contractor, or provides services that are specifically described in the policy.
In those contracts in which economic activity is secured or guaranteed, as in the case of Bonded Customs Agents, or public officials who are required to present this guarantee, the policy has a certain number of variables that Dee Studler will analyze in another post. The generality of the claims is derived from a lack of inventory, dishonest acts of the employees, and systematic robberies that end with collusive damages of a great amount to the detriment of the guaranteed ones. The loss can be of money or goods, for the duration of the policy.
Here, the dedicated professionals from Studler Doyle will try to illustrate how to best handle a claim for both parties and in this way avoid any harshness that may arise in the course of the process.
- It does not matter if your policy is Blanket or Nominative type, it must have the list of employees up to date, with their respective contribution notes to the IRS, affiliation certificates, or employment contracts in case they are not full-time workers. You will always have to offer the insurer proof that the person who committed the crime is your employee or related.
- In the case of workers or people hired for services rendered or eventual work, the insured has the obligation to include them under the insured payroll, describing their occupation, otherwise, there is no coverage.
- As soon as you learn of the crime, report it to the competent authorities. With the sponsorship of a lawyer, you must establish a particular accusation against the alleged perpetrators of the crime.
- You must request an investigation of the facts, not only by the public prosecutor, you must make all the accounting investigations, and audits of necessary procedures in order to find the culprits.