Small Business at Risk Of Crime

According to PwC’s Global Economic Crime Survey 2014, one in three small businesses reported an economic crime in the last 12 months. When larger corporate organisations were reviewed as a sector statistic, results suggested 6 out of 10 companies of this size had experienced a fraud in the last 12 months.


All companies are vulnerable to the threat of criminal acts, from the fraudulent behaviour of their own staff, to cybercrime involving the internet. Cybercrime continues to increase in volume, frequency and sophistication. Whereas it used to be an issue for firms that transacted business online, it is now an area of vulnerability for any firm that uses computers, sends emails, has a website and/or uses online banking.

Criminal gangs are increasingly using fake email addresses for scams that involve false invoices and dummy bank accounts. In essence, old frauds perpetrated in new ways.

Plus, there is still “the enemy within”. Traditionally, losses have emanated from management, procurement, HR and finance teams. A drip loss perpetrated by a loyal and trusted staff member can run for years without detection, potentially costing the company many millions of pounds.

These losses will also cause untold damage to reputation, brand and business relationships. Of course, prevention is better than cure and a robust system of internal controls is key to minimising risk. However, should the worst happen, a comprehensive crime policy can provide essential balance sheet protection.

A crime policy is an ‘All Risks’ cover that wraps round other protections. A fidelity guarantee policy will only protect a firm from the actions of its own employees. Cyber theft cover remains in its infancy and it is important that the terms and conditions are closely monitored. However, many companies are interested in elements of this cover such as damage to digital assets, business interruption from downtime and the like.

Crime cover can be purchased on a stand-alone basis. It will respond to a theft by anyone and can be extended to include cover for a company’s clients, replacement of destroyed or damaged money, identity fraud, public relations consultancy costs and many other expenses caused by a crime loss.

Crime cover will also extend to include any expenses required in proving a loss incurred by the client. This element of cover can often be sizeable as it can be a complex task to unwind any fraud – for instance, specialist forensic accountants are often engaged to assist in proving the required indemnity.

As economies around the world continue to face unprecedented, uncertain and complicated challenges one fact remains certain: when economies are depressed, fraud rises. Companies can protect themselves not only through robust working practices, but also with comprehensive crime cover.

Case Study

A WOMAN SCORNED A long-standing and trusted Finance Director, who enjoyed complete autonomy in his role, had his actions uncovered by a whistle-blower – a jilted lover. The spurned woman informed the company’s CEO who ordered bank sweeps of financial transfers. What it found was that, without dual controls, the FD was simply transferring money into his own accounts. He had used almost £4 million of the firm’s money to fund a lavish lifestyle and his four wives. Please contact us if you would like to discuss how Crime Cover can protect your business. If you would like further information on this subject contact Jonathan Gilmartin on 028 9032 9042 or email .

Kind regards

Jonathan Gilmartin

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