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Fidelity Guarantee Insurance in Singapore

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Fidelity Guarantee Insurance protects you if employees steal from your business.

This type of insurance covers many types of financial crime: forgery, embezzlement, theft, and other dishonest acts. It’s a very common type of insurance among businesses. Crime surveys have found that around 35% of companies in Singapore have experienced financial losses due to employee fraud! That’s a really large number of business owners who’ve had employees commit fraud against them.

If you feel there’s a chance some of your employees may steal from your business, then this insurance policy is perfect for you.

What does Fidelity Guarantee Insurance cover?

Fraud / Embezzlement / Theft against your company: Fidelity guarantee insurance covers fraud, embezzlement, and theft perpetrated by your workers. Essentially, any dishonest stealing of money, goods, or other valuables by your own employees is covered. 

Example 1: Fraud
Let’s say one of your employees colludes with another party to send fake invoices to your firm. Your employee fraudulently sends $20,000 in payments to this fake supplier. This policy would cover the $20,000 that you lost.

Example 2: Embezzlement
For instance, let’s one of your employees forges your signature on your company cheques, and deposits $100,000 worth of company funds into their own account. This policy will pay for the $100,000 that you lost.

Example 3: Theft
Let’s say you run a restaurant, and one of your employees manages the cash register. Over a 6 month-long period, your employee steals $10,000 dollars from your takings. This policy would cover the amount that was stolen from you.

Vicarious Liability: If your employees steal money from other parties, you can be held liable for their actions. This legal concept is known as “Vicarious Liability“. Fidelity guarantee insurance would cover the amount that you are liable to compensate the other party for.

Example 4: Liability to defrauded business partner
One of your employees colludes with an employee working for a business partner. Both workers conspire to defraud your business partner of $50,000 by cashing out fake cheques, and falsifying financial records to hide their tracks. Your business partner discovers the fraud, and files a legal claim against you to recover the $50,000 they lost. A fidelity guarantee policy would cover the damages sought by your business partner.

 

Do I need Fidelity Guarantee Insurance?

Fraud committed by employees is unfortunately very common. In a 2018 report published by PWC, 35% of companies in Singapore were victims of financial crimes committed by employees, up from 22% in 2016. 

Although you can certainly report dishonest employees to the police, there is no guarantee the authorities can recover your lost money. You’ll only be truly protected in such cases if you have a Fidelity Guarantee Insurance policy for your company.

In particular, these types of businesses are especially vulnerable to employee financial crime:

  • Your employees frequently manage financial transactions
  • Your employees have access to valuable goods, particularly goods that are easily sold (e.g. precious metals/jewellery, electronics, packaged goods)
  • Your employees handle cash payments from customers, or have access to cash registers (Food & Beverage stores, retail stores, spas, salons, etc.)

How much Fidelity Guarantee Insurance coverage do I need?

You should consider a minimum of $20,000 coverage. Speak with us for a more detailed assessment of how much coverage you should have.

What are some real-life claims examples?

Case 1: Singapore employee steals over $5.7 million from company in elaborate scheme 

A logistics manager who worked for a Singapore electronics firm stole 25,501 iPhones from her employer. From 2016 to 2017, the manager colluded with another employee to steal iPhones from the company’s warehouse. The phones were sent to Malaysia to be sold. The total value of the stolen phones was a massive $5.7 million. The fraud was discovered when Apple conducted a surprise audit at the company. The electronics firm was forced to compensate Apple $5.7 million for the lost phones. Unfortunately, the company was not able to recoup this amount from the employee who perpetrated the theft. 

If the company had Fidelity Guarantee Insurance, the insurance company would have compensated the company for their loss. 

Case 2: Account executive steals $106,390 from employer

An account executive masterminded an elaborate fraud against her employer, stealing $106,390. The fraud was carried out from 2014 to 2016. The executive was responsible for preparing company cheques, audits, and other financial matters. The executive abused her powers to forge 30 cheques. After the company director signed off on the cheques, the executive would use correction tape to change the payee’s details to her own bank account.  The executive also forged bank statements, which allowed her to avoid detection for almost 3 years. The fraud eventually came to light in 2017, when the company director sought financial statements directly from the company’s bank. It was then that the company director discovered discrepancies between the forged documents and the bank’s documents.

If the employer had Fidelity Guarantee Insurance, the policy would have paid the $106,390 that the executive had defrauded the company of.

Case 3: Cashier at NUS cafe steals $30,000 over 2 year period 

A cashier at an NUS cafe stole $29,856 from the business, over a period of 2 years. The cashier went to great lengths to hide her crimes. The cashier would purposely avoid logging certain sales and would edit the sales logs to ensure that the daily balance would tally. The crime was only discovered when an observant colleague noticed the cashier performing suspicious actions on the POS (Point-of-Sale) system, and reported the cashier’s actions to the cafe owner. 

If the cafe had a Fidelity Guarantee Insurance policy, the insurer would have compensated the company for the amount stolen.

What other types of insurance should I have, besides a Fidelity Guarantee policy?

  • Coverage for Professional Negligence: Financial losses resulting from professional mistakes, or accidental omissions (not fraudulent activity). You’ll need a Professional Indemnity Policy to cover this.
  • Coverage for Cyber Extortion or Blackmail: With the increase in cyber extortion and ransomware events, it is prudent to consider Cyber Insurance. Cyber Insurance will cover the cost of a cyber extortion attempt.
  • Coverage for Employee Injuries: If you have workers, protect them against injuries or sickness with WICA Insurance.
  • Coverage for Commercial Property Damage: If you rent or own a commercial property, you should protect yourself with Commercial Property Insurance.
  • Coverage for 3rd Party Liability: Your business can be held liable if you cause property damage or injuries to third-parties. Make sure you protect yourself with Public Liability Insurance.

How much does Fidelity Guarantee Insurance cost?

Fidelity Guarantee Insurance starts from just $9/month. It’s a highly affordable type of coverage, that brings you outsized benefits by protecting you from employee dishonesty.

With Provide, you save up to 25% on your premiums. Because our digital operating model creates lower overheads, we pass these cost savings back to our clients.

Buy Fidelity Guarantee Insurance from just $9/month. Speak with us today!

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