What to Know About Employee Fraud

What to Know About Employee Fraud

Small businesses need to be on their guard because of their overall size from threats, but what happens when these threats come from one of their own?

Small business owners know the risks they face on a daily basis from external forces trying to shut down their business. But what should happen if the threat comes from the inside? We don’t mean a short in wiring causing a fire–despite it being a real enough threat–we mean the threat coming from the inside–like right out of a 007 film.

You may think that your employees work for you, but there’s always the risk that they turn against you and by the time you’ve realized your mistake, it’s too late. Here is what you need to know about employee fraud.

Employee Fraud Statistics

  • Employee fraud accounts for a total of 5 percent of business revenue lost, and never seen again. The median loss caused by fraud is $145,000 and it usually takes 18 months to discover that you have lost this money.
  • 85 percent of all cases lead back to stealing and misappropriating assets.
  • Small businesses suffer a 6 percent higher median loss from employee fraud than their larger corporate competitors.
  • An astounding 58 percent of businesses that are victims of employee fraud never recover a single dollar from this employee fraud.

Why Employees Commit Fraud

  • Opportunity: The ability to carry out a fraud and their perceived chance of not being caught.
  • Pressure: A real or perceived need to steal, usually financial or familial.
  • Rationalization: This is the way that the fraudsters justify the theft.

The proper business insurance may step in to cover what you’ve lost due to employee fraud. For help acquiring the right business insurance for your business, contact the independent insurance professionals at Risk Management LLC in Brookfield, Wisconsin.

  • Risk Management assisted me in determining the best insurance coverage to match my business’ risks. Not only did their professional staff spend ample time meeting with me to understand my business, but they continue to follow up with a phone call on a regular basis. I’d consider each of the members on the Risk Management team a true asset in my corner, as they assist to resolve complex insurance issues including GL, Med-pay, business interruption, unemployment insurance, and most importantly, claims management. Their ongoing research in the insurance industry allows my rates and coverage’s to be best in in class, which helps me to remain competitive in my industry.

    -Steve, S. former owner of Helium Trampoline Park

  • “When we want develop partnerships with vendors, the deciding factor is always based on a single question…Do they pick up their phone? At Risk Management, they pick up their phone. In the indoor trampoline park industry, we have dealt with several insurance agencies that were always more concerned about their commission, not building a business relationship or serving our needs. On more than one occasion, Risk Management has stepped in and helped us with carrier/policies issues that the incumbent agencies had dropped the ball on. There was no financial reward for Risk Management in these situations, they see a problem and help fix it. They just do business the right way. Steve Young and his team at Risk Management represent us, not the carrier. We highly recommend Risk Management.”

    -Mark M. Operations Manager,CEO Fun Palace Place

Address: 21420 W. Greenfield Ave Ste 100
New Berlin, WI 53146
(262) 785-8930
Toll Free: (888) 857-5144
Fax: 1 (800) 424-3955
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