What is the worth of a company’s reputation?

In today’s world of digitalization, there are many ways to make a digital payment. From the traditional bank transfers to PayNow, PayLah! and many more other ways to make a transaction. However, in some industries, cash may still be the preferred option. A few possible reason for this –

1) The amount exceeded the transfer limit.

2) Cheques will take a few working days to clear and may delay the transaction process.

3) Some companies or customers want to save any administrative cost in the transaction.

There are also cases where the staff may mislead the customer to pay in cash and this usually ends up in a fraud or thief.

Recently, a car salesman took more than $60,000 from his customers for the deposits of her car purchase and he later ran off with these deposits. What would you do if you are the boss of this company? Do you want to be responsible for the loss or risk losing your company’s reputation?

In this case, it was lucky the company honours the deal and hands over the car to the buyer. However, how many company can absorb this loss or think of how this sum of money can help your company instead of paying for the dishonest act of a staff? One of the best way to prevent such loss is to have a good working process to reduce the risk for the staff to commit an dishonest act. However, no system is foolproof if a staff tries his means to find loopholes within the process.

Very often, financial adviser representatives help to safeguard our client’s company against financial loss due to fraud or misappropriation of their staff. We mitigate this risk using Fidelity Guaranteed Insurance or, in short, Fidelity Insurance.

Fidelity insurance is a business insurance product that provides protection against business losses caused due to employee dishonesty, theft or fraud. The policy compensates such losses to business owners within the limitations of the policy. The loss may not always be money, it can be goods as well. Typically, Fidelity Insurance can be classified into the following

Types of Fidelity Insurance

• Individual policy – As the name indicates, such policies limits the coverage to losses due to fraud or dishonesty of an individual employee. For e.g. A company has 5 staff that handle money. If they did not name a staff as a risk under the policy and this particular staff commits a thief, the policy will not compensate for the loss.

• Collective policy – The coverage is provided against the business losses caused due to fraudulent acts by a group of employees under the collective policy. The insurer’s will decide on the based on each employee’s responsibilities and position. For e.g. A cashier managing the cash registry may has lesser opportunity to commit a thief and the amount will be much lower as compared to the manager who handles the daily takings of the outlet.

• Blanket policy: Blanket policy covers a group of employees without the names of the guaranteed person. This type of policy is commonly issued to well-established businesses.

• Floater policy: This policy is similar to the Blanket policy but a Floater policy guarantees a group of employees with one amount of guarantee that is given across the group. We usually need a minimum number of staff to put this policy in place.

The advantage of an Individual policy is it has the lowest premium among all the policy. The disadvantage is missing out the name of a staff especially when a new employee join the establishment. It can be administratively cumbersome too if there is a high turnover of staff.

The advantage of an Collective policy gives a wider scope of coverage and the premium is still low compared to a blanket policy. It also save the hassle of informing the insurer when there is a change of staff. However, there is still a risk of not informing insurer when staff change their roles or responsibility and insurer may reject a claim base on that non-disclosure.

Quite obviously, Banket and Floater Policy are convenient to implement as it covers almost everyone that deals with money in the establishment. The disadvantage is costing! The premium is usually highest among all the policies assuming the coverage are the same.

The premium and benefits of different insurers varies. If you need to speak to one of our representatives to assess your risk and know which policy better suits your company, just complete the form below and we will assist you ASAP.