Recent trends show an increase in employee theft and fraud over the past few years, with potentially devastating consequences. According to the Association of Certified Fraud Examiners, U.S. organizations lose about 7% of annual revenues to fraud. Moreover, the median occupational fraud loss is $175,000, and more than 1 in 4 frauds involves losses of $1 million or more. Finally, small businesses (fewer than 100 employees) are especially vulnerable to occupational fraud, suffering median losses of $200,000.
These trends highlight the importance of acquiring Fidelity insurance. Businesses should also ensure that the insurance offers coverage and limits adequate to respond to this growing threat. Fidelity coverage can be written to cover not only theft of money, securities and other property by employees, but also crimes committed by third parties, such as forgery, robbery, computer fraud and funds transfer fraud, and theft of money and securities inside the premises.
Fidelity insurance does not need to be expensive, and it is widely available. Each business should begin by examining its level of exposure to employee and non-employee theft, and then purchase an insurance plan adequate to address that threat.