Crime Insurance
Crime Insurance is a necessary coverage for just about every business. The most common options are Money & Securities, Theft, Burglary, Robbery, Computer Fraud, and Employee Dishonesty
Crime (Employee Dishonesty) Loss Scenarios From Chubb
Every company, regardless of size, is a potential target for white collar crime, which causes businesses to lose billions of dollars annually. This is commonly referred to as Employee Dishonesty.
Estimates of losses start at $40 billion a year, and experts acknowledge that this is one of the fastest-growing, most prevalent problems facing businesses today.
The changing economic environment, advancements in technology and international expansion make the threat of loss more ominous than ever before. Is your company at risk? Consider these crime loss scenarios, and then talk to us about coverage from Chubb, a leading underwriter of Crime Insurance for more than 50 years.
Transportation Company
A high-level marketing executive working for a transportation company set
up a fictitious firm, in collusion with his wife and in-laws. The firm over
billed for services that were performed, and also billed the company for
services never rendered. Over the course of several years, the scheme resulted
in a loss to the company in excess of $2,500,000.
Loss. $2,500,000
Paper Products Distributor
The distributor's general manager, in collusion with her colleague in the
warehouse, diverted raw material before it became inventory to a competitor.
They also sold the competitor jumbo rolls of paper and finished products
that they stole from the warehouse. The competitor had full knowledge of
what was transpiring. The distributor sustained a loss well in excess of
$3,000,000.
Loss. $3,000,000
Cruise Ship Line
The cruise ship line's senior vice president wire-transferred funds from
the line's account to his own bank account for personal use, and he also
obtained kickbacks from vendors. He then sold property he owned to the line
at inflated prices. Losses sustained by the cruise ship line were $2,000,000.
Loss. $2,000,000
Pharmaceutical Manufacturer
The manufacturer's regional sales director approved the payment of invoices
for promotional items submitted by five suppliers, each owned or controlled
by the employee's spouse and her friend. The prices were inflated on those
items actually provided. Other invoices were paid by the manufacturer for
nonexistent goods. The manufacturer estimated that its loss over a five-year
period was well in excess of $1,000,000.
Loss. $1,000,000
Source, Chubb & Sons