An organisation needs to make an informed decision as to whether it wants to maintain fidelity insurance or not. When considering this issue, questions to consider include:
- What will the insurer require to enable a payment to be made (ie. Will it require a full investigation to be completed, will the insurer require a conviction?)
- How long will it take for the insurer to make a payment? The longer the time it would take, the longer the organisation could suffer financial stress as a result of the fraud.
- What is the excess of the claim and what is the maximum payout?
- What is excluded from the policy? For example, one policy I saw excluded forgery – this could potentially exclude fraud where an employee forges a signature on an organisations cheque.
Again, an organisation needs to make an informed decision considering the cost of the policy and the benefits that may flow from the policy if a claim is needed to be made.