In South Africa, as well as many other countries throughout the world, employee fraud is at an all-time high. Commercial crime risks must be managed, but business owners can also seek to protect their companies through commercial crime insurance.
What do policies cover?
- Employee dishonesty – Your staff stealing from you, alone or in collusion with others.
- Computer fraud – Theft by accessing of the insured’s computer system by any person.
- Computer virus – Loss sustained directly as a result of a computer virus.
- Electronic data loss – Loss sustained directly as a result of the malicious alteration or destruction of data.
- Extortion – Loss as a result of any employee being threatened with physical harm.
- Fraudulent transfer instructions – loss sustained directly as a result of fraudulent instructions to a financial institution holding your assets.
Commercial Crime Claim Insights:
Criminals always seem to be one step ahead and have an endless supply of creative, ingenious, and daring strategies. No matter how strong a company's risk management may be, they will never completely remove the chance of becoming yet another victim. It seems like every time we plug one loophole, they manage to discover another.
As brokers, we like to believe that we are familiar with the risks that come with particular businesses and how to mitigate them. However, things don't always turn out that way...
Like the pharmaceutical storage company, which despite having excellent procedures and controls in place to protect the high-risk medications they were holding, was scammed of R1.5 million by a worker who stole paper.
Or the mining firm, which also suffered an R1.5 million loss as a result of the CEO's PA mishandling their stock of giveaways like shirts and caps.
What’s Not Covered?
Includes but not limited to:
Examples of consequential losses which would be excluded are as follows:
- Reputational damage or loss of brand value.
- Interest which may have been earned had the loss not occurred.
- The loss of potential profits which would potentially have been earned had the loss not occurred.
- The loss of business to a competitor as a result of employee dishonesty (even if that competitor is an ex-employee who may have stolen confidential customer data).
- Potential loss of income/profit as the result of the theft of trade secrets or intellectual property.
Stand alone Body Corporate Commercial Crime/Home Owners Association Insurance
- Cover for commercial crime in terms of the CSOS legislation passed.
- We are able to underwrite sums insured as low as R100 000 up to a maximum of R50M.
- We can provide this cover as a stand alone commercial crime policy.
- The policy covers the theft of Body Corporate funds which may be stolen by the Managing Agent and/or Trustee as long as the managing Agent in question is declared on the proposal form.
Dual authority and segregation of duties risk management tips
- VERY Important when loading new beneficiaries and amending the banking details of existing beneficiaries.
- One person must not be able to load, authorise and release payments. Preferably a different person for each of these functions but a MINIMUM of two people to complete a payment.
- Unexplained loss of money or property is not covered by a commercial crime policy – Insured must be able to show how the money or property was misappropriated.
Contact us for your commercial crime insurance needs.
