Employee theft is the most common form of business fraud (according to Allianz Trade's annual fraud survey). Think of goods disappearing from your own warehouse thanks to tricks. Or anything else: the misuse of company data.
Every company's nightmare: fraud by its own accountant
An adapted real-life example (with fictitious names):
A textile wholesaler with several branches mainly imports clothing from China. The company has enjoyed great success selling clothing (T-shirts) printed with well-known anime characters. Since its creation in 2008, the company has grown rapidly. Two years after its creation, accountant Jan H. was hired to strengthen the finance department. He was a solid, experienced and hard-working colleague who quickly gained the trust of management. He was soon given full power of attorney to manage the company's various accounts.
After about five years, he began to act fraudulently. He systematically transferred tens of thousands of euros into his own bank accounts. To do this, he used false invoices and also made false VAT declarations. Later, he also began withdrawing cash, much of which was booked as a debit current account of the management holding company. After being questioned by the tax authorities, the leak was revealed. Jan H. was dismissed without notice. The company also took the matter to court, demanding refund of the stolen money. Jan H. was found guilty of embezzling €580,000. He must repay this sum. The Chamber of Accountants suspended him for 3 years.
How can this situation be avoided?
Average losses: 20% over €200,000
Our own annual fraud survey shows that around 80% of companies (with an annual turnover of at least €10 million and at least 50 employees) have recently been victims of (attempted) internal or external fraud. Of these 80%, a majority have actually suffered losses.
In terms of fraud committed by company employees (internal fraud), the four main types of fraud are
- Misappropriation of goods or money;
- False declaration;
- Falsification of documents and
- Industrial espionage.
Internal fraud is committed three times more often by men than by women. A third of internal fraudsters work in the finance department. Nearly half of all cases involve losses of €50,000. And 20% exceed €200,000.
Protect your business with fraud insurance
Of course, it's a good idea to take solid preventive measures (see the paragraph on our prevention tips). But even so, the risk of internal fraud remains. There is no such thing as zero risk. To prevent your company suffering a significant loss as a result of fraud, Allianz Trade offers fraud insurance that can be tailored to any type of business.
What does Allianz Trade's fraud insurance offer?
With our fraud insurance, you limit the financial damage caused by fraud (not only internal fraud, but also external fraud). We compensate you for most of the stolen money, the value of the stolen goods and additional fraud-related costs, such as legal fees. With our fraud insurance, you protect your business not only against financial loss, but also against damage to systems and your reputation. What's more, you can count on expert advice to help you avoid fraud.