Let's start with some numbers:
- In 2011 the FBI secured $2.4 billion in restitution for corporate fraud
- The same year, the FBI ordered $16.1 million in fines from corporate criminals
- The median loss in a fraudulent scheme for businesses of 100 employees or less is $190,000
Corporate fraud, or “white collar crime,” is one type of business risk that nearly every commercial enterprise can encounter, whether it is a large corporation, a farm, a school, a restaurant, a non-profit charity, a medical practice or a machine shop. This is because any business operation, large or small, involves the exchange of money for goods and services.
According to the Association of Certified Fraud Examiners (ACFE), small business owners tend to believe their company is not prone to business fraud. However, in a study, the ACFE found that small businesses are actually at a greater risk of employee embezzlement simply because they have a higher level of trust in their staff. The result of that trust can, unfortunately, result in more opportunity and more temptation for those who have access to the financials.
There are a few key lessons we can learn from the ACFE business fraud study:
- The first step in mitigating risk is to gain a full understanding of what can happen in the course of doing business.
- The worst time to find out that you need coverage for a problem is after the incident has occurred.
A qualified commercial insurance agent can work with you to help you evaluate your business risks and reduce your exposure. Contact Alliance Insurance Group today to protect yourself and your business. Give us a call at 888-279-9701 for your Colorado Business Insurance needs.