It is vital for South African businesses to take the right steps to protect their operations from potentiality catastrophic financial loss.
This is the word from Jurgen Hellweg, CEO of Western National Insurance, who says that small-and-medium-sized enterprises (SMEs) face the biggest risk of major loss from this threat.
“The latest Association of Certified Fraud Examiners (ACFE) Report to the Nations shows that South African companies experience the highest level of fraud in sub-Saharan Africa, followed by Kenya in second place and Nigeria ranking third.”
What is most alarming about this trend, according to Hellweg, is the fact that small businesses with less than 100 employees experienced the highest median losses of any organisation type.
“The report shows that companies with less than 100 employees typically lose around $150 000 (~R2,3-million) when fraud occurs. That is a blow that very few SMEs can recover from.”
He explains that this is why having adequate fidelity insurance is crucial to the survival of the business. “Fidelity insurance is a class of insurance that is designed to protect against losses resulting from fraud or theft by an employee. To put it more accurately, it covers the quantifiable direct financial losses that companies suffer if employees defraud them for personal gain.”