Why Every Florida Business Needs Fidelity and Crime Insurance
Every business could benefit from appropriate coverage through fidelity and crime insurance. It is impossible to predict when criminals might strike, but the damage to your business can be extensive. From computer crimes to armed robberies, the losses that stem from these criminal acts could haunt your business for years to come.
Insurance coverage can protect your business when it is victimized. It can replace stolen funds and pay for the cost of dealing with data breaches or physical break-ins. The outcome of these claims can be the difference between staying in business and closing forever.
Unfortunately, the insurance companies do not always make the claims process easy. When your claim is unreasonably denied, it is time to discuss your options with experienced legal counsel. Ver Ploeg & Marino is a Miami law firm dedicated to aiding businesses and homeowners during the claims process.
What is Fidelity and Crime Insurance?
Fidelity and crime insurance policies protect businesses from losses caused by criminal or fraudulent acts. The term generally describes two coverage options: fidelity bonds and crime insurance. While there is some overlap—particularly when it comes to employee embezzlement—there are also important differences to be aware of.
Despite the name, fidelity bonds are not bonds at all. They cannot be transferred or accrue interest like other bonds. Instead, they are essentially insurance policies designed to protect a company from fraud caused by an employee.
Crime insurance policies protect a business from a wide range of criminal activity, from embezzlement to robbery. Because many crimes are committed by people who work for the business, there can be overlap with fidelity bonds.
Ultimately, the purpose of these coverage options is to provide protection when fraud results in a loss to the business. The proceeds from these claims can replace missing funds or cover the expenses that can come with a security breach. The funds paid out by your insurance company can go a long way toward covering what you lost.
Companies Face Internal Threats They Never See Coming
Most companies take a number of precautions before they hire a new employee and place their trust in them. Long before a job offer is extended, most companies take precautions like background checks and references to make certain they are not hiring someone problematic.
Unfortunately, there is no surefire way to determine if a new hire can be trusted. The lack of a criminal record is not enough to be certain, especially for someone who is well-liked by previous employers.
The unfortunate reality is that countless businesses have been taken advantage of by employees who were trusted with access to bank accounts, sensitive information, or other things of value. In some cases, these acts are committed by long-term employees who have worked for the company for years.
Depending on the size of the business, it can be impossible for a company to function without trusting certain employees with access to valuable accounts or information. Even when risks are mitigated, there is always the chance that an employee decides to embezzle funds or fraudulently open up a credit card in the name of a business.
These acts of fraud can happen despite your best efforts. There is no way to predict this behavior with certainty, which makes it a question of managing risks that are outside of your control. The best way to do that is by investing in fidelity bonds and crime insurance that will cover any losses that might occur.
Crime Insurance Can Protect Against Fraud Committed By Third Parties
Not every risk comes from an employee. There are a number of third parties that could also take advantage of your business. This includes total strangers involved in robbing your company’s physical location. More often than not, it relates to third parties using computer fraud and social engineering to gain access to sensitive information and bank accounts.
Businesses also frequently rely on contractors who are not technically employees but who have significant access to the inner workings of a business. These individuals have an easy path when it comes to defrauding a company.
HOAs and Condo Boards Always Need Crime Coverage
Every business could benefit from the protection of a fidelity bond or crime insurance policy. This type of coverage is especially important when it comes to entities like condo boards and homeowners associations. In fact, it is required by law.
Most organizations have the right to weigh their risks and decide if purchasing a fidelity or crime policy is a good idea. That is not the case for HOAs and condo boards, thanks to Florida Statute 718.111. According to the statute:
The association shall maintain insurance or fidelity bonding of all persons who control or disburse funds of the association. The insurance policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time. As used in this paragraph, the term “persons who control or disburse funds of the association” includes, but is not limited to, those individuals authorized to sign checks on behalf of the association, and the president, secretary, and treasurer of the association. The association shall bear the cost of any such bonding.
Embezzlement among condo board members is rare, but when it happens, it impacts a large number of people. Given how many families this type of fraud can affect, the high stakes require adequate coverage.
Talk to an Attorney About Your Denied Fidelity and Crime Insurance Claim Today
These insurance policies are designed to be your fallback when the unexpected happens. Unfortunately, insurance companies are known for finding excuses to deny valid claims. When this happens, it can be a catastrophic event for the future of your company.
Ver Ploeg & Marino is here to help you get the most out of your claim. We understand what it takes to hold insurance companies accountable, and we look forward to putting that experience to use for you. Contact us right away to get started.
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