Covering the cost of dishonest directors and staff

Around a thousand directors a year are involved in disqualification proceedings – and that’s only one in four or so of the almost 5,000 cases a year looked at by the government’s Insolvency Service.

While many are sole directors, a lot of the cases involve fraud and dishonesty that can take down an otherwise profitable business out of the blue.

Covering the cost of dishonest directors and staff

Comprehensive cover for fraud and theft

The inquiry may end up in a wrongful dismissal suit at an employment tribunal or involve the police and taking a case to court.

Along the way, your business will have a soured reputation and will have to compensate anyone who has a financial loss because of the wrong-doing.

You may have to undergo an audit, recruit and train new employees and review business processes.

The policy will pay out for a lot of these expenses and could be the difference between a business failing or soldiering on under such adverse circumstances.

Trusted employee plundered bank account

If you feel this is something that only happens to someone else, here are a couple of recent examples of employee dishonesty.

In one case, a trusted employee plundered nearly £400,000 from a family-run letting agent over a decade.

That’s money that needs repaying to customers, suppliers and tenants and would make a huge dent in the cashflow of many letting and estate agents.

Unfortunately, such cases are not rare.

Covering the cost of dishonest directors and staff

Why directs and officers cover is important

Another letting and estate agent was jailed for two years for stealing £140,000 from 43 friends, landlords and tenants. His thefts of cash were spotted by an accountant who quizzed him about withdrawals from the company bank accounts that had no business purpose.

In a third case, a sacked letting agency worker hacked into the office network after his dismissal with a colleague’s password and stole £6,000 which was spent on gambling debts.

It’s easy to see the good in people and offer them the trust you would expect in return, but the sad fact is a dishonest director or inquiry can ruin a business almost overnight.

Call Hamilton Fraser on 0345 310 6388 or email info@hfprofessionalindemnity.co.uk for a bespoke professional indemnity policy designed with the agent in mind.

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