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The Most Common Crimes Committed Against Businesses

The Most Common Crimes Committed Against Businesses

The Most Common Crimes Committed Against BusinessesThe very nature of business commerce – the activity of buying and selling on a large scale – is exactly what makes businesses susceptible to a variety of different crimes. Money is almost always the main motivation in business crimes, and in some cases the thieves feel justified stealing from a “corporation” rather than a person. However, money stolen from corporations has to come from somewhere, and stealing from businesses can lead to negative consequences for innocent employees or vendors due to the lack of funds.

Listing all of the possible crimes against businesses would be an exhausting task, but they can be broken down into three main categories: cyber crime, non-employee crime and employee crime.

Non-Employee Crime

Shoplifting is the most common non-employee crime, and is the source of over 35% of inventory shrinkage for businesses. The theft of merchandise, even in small amounts, can cause a lot of problems for business owners. Attempting to catch a shoplifter in the act can even open the business up to more liabilities, such as being sued by the accused shoplifter, costing the business even more money to defend themselves. Burglary and vandalism are other common non-employee crimes that can be costly for businesses.

Cyber Crime

Almost every single business in the U.S. is vulnerable to cyber criminals, targeting computer networks to gain access to personal and financial data. According to a 2017 study on the Cost of Data Breaches, the financial damages of the average cyber breach can reach $3.62 million. and that number is only expected to rise in the near future. In addition to the monetary damages, a data breach can also damage a business’s reputation with their clients, employees and the general public. Thankfully, businesses are starting to get more savvy when it comes to the growing threat of cyber crime by prioritizing their need for cyber security services and cyber liability protection.

Employee Crime

Employee theft is a major concern for businesses. Although most businesses try to thoroughly screen applicants in order to hire only the most trustworthy employees, it’s impossible to predict if and when someone will result to stealing from their employer. However, the likelihood of an employee stealing from their employer is rather high. According to the 2015 employee theft statistics from Statistic Brain Research Institute, 75% of employees have stolen something from their employer at least once, though the percent drops significantly (37.5%) when it comes to employees stealing a second time or more. Still, employee theft costs U.S. businesses approximately $50 billion each year.

The most common employee crimes against businesses include:

  • Vendor Fraud
  • Funds Theft
  • Check Fraud
  • Payroll Fraud
  • Credit Card Fraud

All of the above crimes essentially involve taking money from its intended destination and directing to an account for the thief. It can take an average of 2 years to detect employee fraud, making it a very costly crime to recover from. Business who have a commercial crime insurance policy, however, can get help with financial recovery resulting from certain employee crimes such as the ones mentioned above.

About Axis Insurance Services

Axis Insurance Services specializes in providing employers with EPLI coverage and would be happy to discuss this must-have protection with you, particularly critical in today’s litigious environment. Just give us a call at (201) 847-9175.

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Blogged on: June 25, 2018 by Mike Smith
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