Kathryn Moon, managing director of insurance broker, risk management specialist and consulting firm Gallagher in Coventry, explains: “Fraud can be a massive problem and as businesses become increasingly digitalised, it is likely to get worse. Global fraud research undertaken by financial service professionals Crowe reveals that annual UK losses to fraud are estimated at £110 billion, with the vast majority of this coming from the private sector[1]. For the private sector, some of the most common losses are procurement and payroll fraud, followed closely by financial sales fraud, such as online and telephone banking scams. Another area to consider is cyber-crime, of which 1.9 million incidents were though to cyber related last year.[2]

“Fraudulent activity can often occur from within an organisation, including anything from misuse of credit cards and employees claiming false or inappropriate expenses, to fraudulent cheques. External fraud can include identity fraud by hijacking bank accounts or phishing emails, false invoicing and theft of databases to be sold on to third parties.

“Fraud can affect any business no matter what size. That’s why it’s important to have a robust insurance policy in place so that, if the worst does happen, your business can bounce back with minimal damage to your revenue, reputation and long-term financial health.”

There are two types of insurance available:

• Fidelity Guarantee or Employee Crime only – this offers protection and compensation should a business be defrauded internally by the finance director, employee or a temporary worker.
• Crime insurance – wider protection that covers externally perpetrated fraud as well as internal, whether that involves the public, organised crime or temporary workers. Such cover may also include computer-based theft.

 Ian McKinney, senior account executive at Gallagher, adds: “In the last six months, Gallagher’s Coventry office has dealt with claims for six serious fraud incidents worth anywhere from £8,000 to £250,000, all against businesses who felt their fraud risk management systems were robust. This highlights the extent of the problem and it’s often a case of things just slipping through the net during pressure points in day-to-day business activities, which can’t always be foreseeable and therefore mitigated against. That’s where Gallagher can step in to ensure you have the right insurance policy in place to protect your business.”

If you’d like to find out how Gallagher can help, please call Ian McKinney on 024 7623 2619 or email [email protected].

[1] https://www.crowe.com/uk/croweuk/insights/financial-cost-of-fraud-2018

[2] https://www.ons.gov.uk/peoplepopulationandcommunity/crimeandjustice/bulletins/crimeinenglandandwales/yearendingseptember2018#overview-of-crime