WORCESTER, Mass., Oct. 9, 2014 /PRNewswire/ -- In support of Crime Prevention Month, The Hanover Insurance Group, Inc. (NYSE: THG) has shared insights into four common crime schemes and provided best practices for business owners to help prevent these schemes within their own companies.
"Business owners spend a significant amount of time and resource protecting their business from a variety of risks, whether it's liability for their products or services or severe weather," said Helen R. Savaiano, president of management liability at The Hanover. "But, what can sometimes be overlooked are the risks presented by unscrupulous employees and unfortunately those types of losses happen more often than business owners think."
Based on a study of claims experience, The Hanover identified the following four common crime schemes in business:
- Billing and Vendor Schemes - Employees set up false vendor accounts and bill a company for non-existent parts or services.
- Check Tampering Schemes - Employees use company checks to pay themselves or reissue the company's old outstanding checks and alter the payee to themselves.
- Payroll Schemes - Employees manipulate the amount on their check, or create duplicates of their check to cash more than once.
- Expense Reimbursement Schemes - Employees submit additional expenses that never occurred or were not of a business nature and are then reimbursed for those bogus expenses.
Many business owners don't realize they could have been protected from fraud committed by their own employees until it's too late, according to Jeffrey Gordon, vice president of fidelity and crime at The Hanover. While insurance protection is available through some carriers for this and other crimes, not all business owners secure coverage. "We always advise owners to work with a knowledgeable independent insurance agent to ensure they have the right coverages, like fidelity and crime coverage, and place that coverage with a carrier who has expertise, so they can meet the specific needs of their business," said Gordon.
The Hanover recommends business owners consider the following best practices:
- Perform thorough background checks (in accordance with law) of all potential hires; don't take shortcuts or assume.
- Make sure there is clear accountability for every position in the organization and no position has broad enough power to authorize payments without the consent of another individual. Seek to set up a system of checks and balances.
- Set up a tip line for the organization, guaranteeing anonymity, in order to allow for the reporting of any suspicious activity or suspicious business practices.
- Encourage all employees who handle accounting and payment functions to take vacation time, with another person handling their work in their absence.
- Communicate often and clearly about the company's policy on employee conduct.
- Don't allow discrepancies to be attributed simply to the cost of doing business. Be sure to conduct a thorough investigation of discrepancies.
To view an infographic on the most common business crime schemes: http://bit.ly/1o1mqAf
For more information on protecting your business from employee theft: http://bit.ly/1kU3Cz8
To find a local independent agent in your area, visit hanover.com.
ABOUT THE HANOVER
The Hanover Insurance Group, Inc., based in Worcester, Mass. is the holding company for several property and casualty insurance companies, which together constitute one of the largest insurance businesses in the United States. For more than 160 years, The Hanover has provided a wide range of property and casualty products and services to businesses, individuals, and families. The Hanover distributes its products through a select group of independent agents and brokers. Together with its agents, the company offers specialized coverages for small and mid-sized businesses as well as insurance protection for homes, automobiles, and other personal items. Through its international member company, Chaucer, The Hanover also underwrites business at Lloyd's of London in several major insurance and reinsurance classes, including marine, property and energy. For more information, please visit hanover.com.
CONTACT:
Emily Trevallion
Media Relations
[email protected]
(508) 855-3263
The recommendation(s), advice and contents of this material are provided for informational purposes only and do not purport to address every possible legal obligation, hazard, code violation, loss potential or exception to good practice. The Hanover Insurance Company and its affiliates and subsidiaries ("The Hanover") specifically disclaim any warranty or representation that acceptance of any recommendations or advice contained herein will make any premises, property or operation safe or in compliance with any law or regulation. Under no circumstances should this material or your acceptance of any recommendations or advice contained herein be construed as establishing the existence or availability of any insurance coverage with The Hanover. By providing this information to you, The Hanover does not assume (and specifically disclaims) any duty, undertaking or responsibility to you. The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.
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SOURCE The Hanover Insurance Group, Inc.