Insurance is one part of managing employee fraud exposure.

Strong financial controls can reduce both the likelihood and potential size of a loss.

What is segregation of duties? #

Segregation of duties means avoiding situations where one person controls every stage of a financial transaction.

For example, ideally the same person should not be able to:

• Create a supplier.
• Approve the invoice.
• Change the bank details.
• Make the payment.
• Reconcile the bank account.

Separating these functions makes fraud harder to conceal.

What payment controls can help? #

Examples include:

• Dual payment authorisation.
• Transaction limits.
• Independent approval of unusual payments.
• Verification of bank detail changes.
• Call-back procedures.
• Restricted banking permissions.

What accounting controls are useful? #

Businesses can also consider:

• Regular bank reconciliations.
• Review of supplier master files.
• Payroll audits.
• Review of employee expenses.
• Monitoring unusual transactions.
• Independent financial review.

What about IT access? #

Limit employees to the system permissions they actually require.

Review access when employees:

• Change roles.
• Leave the business.
• Gain additional payment authority.

Does having strong controls guarantee Crime Insurance? #

No.

Insurers still assess factors such as:

• Business size.
• Employee numbers.
• Financial controls.
• Claims history.
• Amount of money handled.

However, strong controls can assist with both risk management and underwriting.