In times of hardship, criminal activity increases, including theft in the workplace. A report from Zurich Insurance shows an increase in commercial crime claims, so businesses should implement measures to protect themselves. Peter Robinson, Managing Director at Prizm Solutions, an insurance broker specialising in SME and Corporate business insurance, provides his opinion on what steps vehicle recycling businesses could take.
The facts speak for themselves that, during a recession, crime increases. And we don’t just mean, ‘smash & grab’ burglaries either!
A recent report from Zurich Insurance, from analysing the Freedom of Information results from 43 police forces in England and Wales, revealed that almost 6000 workers were caught stealing from their employer in 2022, up from 5000 the year before.
Employee theft can range from pilfering office supplies to the theft of data or even embezzlement of a company’s funds. Zurich’s report noted an increase in commercial crime claims, including employee theft – although overall numbers were low. The report went on to list recent claims, including a £150,000 theft by a ring of employees at a food manufacturer, and a £50,000 claim from a double-glazing firm that was defrauded by its finance manager.
As cost of living pressures mount, employee theft has increased, suggesting some workers could be turning to desperate measures to make ends meet. Desperate measures can mean desperate outcomes for businesses too. Criminal activity can affect all aspects of a business, personal and financial, resulting in reduced staff morale, lower profits, or even potentially forcing a company out of business altogether if the effects were devastating enough.
And it’s not just desperate measures by employees that we need to be on the lookout for. Times of hardship can lead to increased criminal activity too, such as social engineering, where criminals use malicious activities to manipulate employees into performing actions such as making payments or divulging confidential information like handing over bank details and passwords. Zurich’s report highlighted cases where criminals have hacked a senior employee’s email and sent urgent payment instructions with fraudulent bank details to other staff members and external parties.
Theft of equipment may also increase, as the demand for second-hand items rises, meaning companies with plant equipment should take extra care.
So, how can businesses protect themselves against such increases in fraudulent activity? Insurance is, of course, available, but it will be conditional on the business being prudent. Taking sensible precautions, such as implementing two-factor authentication (2FA), can massively assist in protecting against cybercrime and social engineering hacks.
Regarding the theft of equipment, technology can make a positive difference, such as the use of GPS trackers to assist with stolen vehicle recovery (SVR) to increase the chances of a vehicle being retrieved. For example, Tracker™ (www.tracker.co.uk) has a stolen vehicle recovery rate of around 95%, with the majority of vehicles recovered within 24 hours of activation.
In the report, Zurich suggests that firms can help to reduce the risk of employee theft with regular audits, robust payment controls and by keeping the culture of the workplace positive.
Insurers try and set premiums according to the individual risk. The more prudent a business owner is, the greater the probability that the company’s premium will be reflective of the reduced risk to an insurance company, as claims statistics will demonstrate the care taken to minimise the chance of a claim.
There are several hundred insurance companies and MGAs (managing general agents, a type of underwriter that specialises in a niche and buys ‘capacity’ from a generalist insurer), so it is always worth speaking to a broker who understands business and especially the sector you’re operating in.
Prizm Solutions was established in 2006, with the aim of looking after business owners properly and not treating them as a cash-cow. We have won numerous industry awards and are known for punching about our weight from our offices in Tamworth, the former capital of the Kingdom of Mercia, in the heart of the country, which gives us excellent transport links to anywhere and everywhere.
Find out more about us at www.prizmsolutions.co.uk
For further information, see www.zurich.co.uk/news-and-insight
