It is essential to prevent fraud in your business if you want to succeed over the long haul as a thriving company. The fraud risks that enterprises face are as much internal as external. Business owners should understand the value of crime & fidelity insurance to help protect against fraud-related losses. Additionally, every business owner should also understand how to minimize fraud risks. Here are a few suggestions to help reduce your company’s risk of fraud.
Recognizing the Benefit of Crime & Fidelity Insurance
Fraud related to your business operations can lead to IRS audits, federal fraud, tax evasion charges, financial reporting errors, and even embezzlement issues. Insurance coverage is essential for recouping losses and covering the associated damages.
Establishing Measures For Reducing Fraud Risks
Even the most comprehensive commercial crime insurance isn’t enough for businesses regarding fraud. Reducing the risk of fraud through proper controls can help make a difference.
Be Attentive To Your Employees
The larger your business gets, the easier it is to overlook the individuals in favor of the big picture. It can prove costly, especially if you have employees loyal to the business who are now working harder than ever due to understaffing or employees struggling with a family member’s serious illness. Be mindful of your employees to spot areas where temptations may increase risks.
Encourage Employee Vacations
When an employee builds up vacation time and never takes time off, that’s a red flag for potential fraud concerns. Sometimes, employees refuse to take time off because they worry about the discovery of their fraudulent behavior.
Create Anonymous Reporting Avenues
Sometimes employees would report fraudulent behaviors if there was an anonymous way to do so. Many individuals want to stay removed from the situation but still would do the right thing when they see something wrong. Offer anonymous reporting solutions and make everyone aware that they exist. It deters some behaviors and encourages reporting.
Establish Internal Control Systems
Checks and balances are essential in every aspect of business fraud solutions. Internal controls, including internal auditing and the separation of duties, can help you reduce the risk of fraud.
Build a Reliable Expert Team
You need professionals on the payroll who can identify and prevent these types of fraudulent behaviors. Auditors, accounting professionals, CPAs, and fraud examiners on staff can help spot early trouble signs so that you can protect your business.
Foster a Quality Corporate Culture
The corporate environment that you create is an important consideration as well. When you build an environment that encourages open-door policies, respect for every contribution, and recognition of success, you reduce the risk of fraud by your employees because they feel valued and recognized.
Choosing Commercial Property Insurance
Along with the measures to prevent fraud, you need property insurance for your business. The right commercial property insurance includes some liability coverage and structural coverage, which helps you cover losses associated with fraudulent activity.
Reviewing Your Crime & Fidelity Insurance
With the proper measures in place to identify and prevent fraud within your business, you should review your crime & fidelity insurance at least once a year to ensure sufficient coverage and identify any new threats.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.
