Most companies will insure their assets for the traditional risks, such as fire and flood. One traditional risk, that is usually covered, is theft or attempted theft. So if a company is offered a Crime Insurance quotation, why would they take it up? Theft is covered under a normal material damage policy, so why protect your business twice?
What some companies don’t realise is that it may not be the physical assets that criminals are targeting any more, but the cash sitting safely in company bank accounts; a traditional theft policy won’t respond to this type of loss. You may have already heard reports from the police that while traditional crimes are falling, fraud and cyber crimes are on the rise. The Telegraph published an article earlier this year noting fraud and cyber crime are now the most common offences.
As crime numbers increase, so do the number of victims. You may think that fraudsters only target the largest companies and that criminals wouldn’t waste their time on small businesses. However, SMEs are much more likely to be targeted by criminals, as well as private individuals, due to less investment in controls and preventative measures. Research from Barclaycard in 2016 estimated that 48% of SME businesses have fallen victim to a cyber crime showing cyber fraud is a much more widespread issue than many businesses realise.
No matter how well-protected a business believes its systems and controls are, fraudsters often break through via simple tricks and human error. As brokers, we have seen various scams that usually involve impersonating a Director of a company; a criminal will hack the Director’s emails or carefully reconstruct their signature, mimic their language and send an email asking for an immediate cash transfer to a new bank account. Criminals bank on the recipient sending the money without question – after all, if it has come from the boss, you would act straight away, right? The button is pressed and once the mistake is discovered it is often too late for the bank to stop the transfer or recover the money.
To minimise the risk of a fraudster breaking through, you could perhaps make it protocol to call clients or colleagues to verify their emails are genuine. We realise that there is always the chance that one request might ‘slip the net’. This is where a specialist crime policy will respond and will cover losses from, but not limited to, external cyber fraud. Insurers are continually offering these specialist policies as the threat of fraud continues to grow.
ProAktive is continually recommending that crime cover is considered as an essential part of an insurance programme. A quick indication can be obtained from a few simple facts and figures before any forms need completing. If you would like an indication please don’t hesitate to contact a member of our team.