Your business is one of your most valued professional assets. As you set up a new business, or are already running a well-established one, you will naturally leave no stones unturned to take it to new heights and become more successful.
Every entrepreneur takes certain safety measures to protect his business enterprise from going into losses or getting damaged in any way.
Now, you gotta secure your business, right? Some of the common ways are simply the key rules of leading a business enterprise. For example, you could begin with hiring the best of the employees at nominal salaries that your business can afford at any point in time, taking key decisions wisely, sharing the key information with the shareholders in order to keep them happy and making way for flexibility in business rules suited to the business environment, etc.
If not that, you could get your business insured against any damages due to natural or man-made disasters or losses incurred due to third-party liability. Most of the entrepreneurs take the insurance route to ensure 100% security for their business enterprise in emergency cases. But, there is another bigger risk involved whenever you hire someone to work in your company.
Even though you may have a strict procedure and an efficient Human Resource Department to check whether the prospective employee has a clear background or not, you can never be sure about their legitimacy as you do not know them personally. Some prospective employees may sometimes involve themselves in smaller crimes like an unauthorized fund transfer.
Now, such internal frauds can suck on to your life like termites. That’s where the commercial crime insurance policy swoops in to cover the losses arising out of such employee malpractices.
Let’s focus on the ways in which a commercial crime policy will come handy to protect your business from internal malpractices.
1. COVERS MISUSE OF FUNDS BY EMPLOYEES:
Official funds might be misused by employees who are dishonest. These funds may either be used for personal expenses by such employees or deliberately transferred to any account without any authority.
Some employees might also commit crimes such as theft of the money kept in the safe or burglary. Losses arising out of such employee acts can be really huge and may leave you helpless. So, a commercial crime policy is always feasible to take as you cannot trust anyone completely these days.
2. COVERS EXTORTION:
Some employees may become an ultimate threat to the business property as they might indulge in criminal offenses like the kidnapping of the owner to extort money from the successfully running business. This may also be done as a revengeful act for something that the employee did not get from your business enterprise.
Commercial crime insurance policy covers the legal fees and the ransom that is demanded by the dishonest employee in such cases.
3. COVERS DATA FRAUDS:
Data frauds done involving technology are a small part of the cyber crimes. These are related to frauds on the part of any third-party or hackers. Such frauds might also be committed by a dishonest employee for his personal gain.
Cyber crimes are difficult to detect and prove and hence, it is necessary that a commercial crime cover is availed by the company to secure the business from such employees. This will enable the owner to continue his business in a solvent way till the matter is solved.
4. THEFT DURING TRANSIT:
Employees may try to ruin an important consignment of goods with the intention to affect your business relationships. If such an employee becomes successful in doing so, it will also lead to huge losses that you will have to bear personally in case there is no insurance policy to cover the resulting loss.
Such acts will generally be committed outside the premises, and it will also be difficult to prove it, thus, leading to a legal battle. Such legal battle may continue for a long time that may eat a large chunk of your business income in the absence of a suitable policy.
Availing a commercial crime insurance policy at a nominal premium will help avoid such losses.
5. SAVING BUSINESS REPUTATION:
An employee committing fraud may not be your mistake, but it may affect the reputation of your company. It is thus recommended to avail an insurance cover that ensures speedy process to cover the losses arising out of employee frauds and also punishing him for the same by paying the legal fees in case of a trial.
So, why wait for all this to happen? A commercial crime insurance policy will completely secure your business from those employees who happen to be a bad seed or dishonest to their duties.