The Aftermath of Insurance Frauds on Businesses
There are a number of different ways to measure the impact of an insurance fraud on businesses. Generally, it is the monetary loss of businesses that grabs the headlines; however, the often overlooked aspects of negative publicity leaves equally damaging stains on a company’s reputation. Insurance frauds are one of those scams that don’t necessarily pose businesses as a victim, but as a perpetuator executing the crime.
Insurance is expanded into a great portion of our economy, majorly the financial sector. From product liability to employee liability and premises, there are different types of insurances. However, when businesses get involved in the proceedings, it’s the insurer that takes the heat at the end of the day. So, it indicates that the insurance frauds have far-fetching consequences where the fraudster suffers from immense loss each year.
The Upshots for Businesses
One of the most common ways that insurance companies make use of in order to counteract this loss is charging high premiums, thereby, increasing business costs. On the other hand, this loss can be covered up by reducing amount being paid out in claims. The latter method seems unviable as the genuine claims become difficult to process and the deserving party ends up getting nothing to cover up his/her losses.
On a broader scale, the insurance frauds and thefts are hugely patchy and fragmented. Every individual that buys an insurance policy is a potential fraudster. By preventing such frauds in the business sphere, the insurer becomes more convinced and assured of the customers’ records and that they are devised to protect the business. As a result, the business vehicles are more protected, the premise is secured from fire-raising and the stakeholders are not enticed to deceive the company.
To reduce an insurance company’s risk of insurance frauds in a business, fortification of controls that prevent monetary fraud seems to be an effective move. Consequently, insurance companies stand at a better position to charge realistic premiums from end-users.
All in all, if a business is convinced and feels secured that if God forbid any mishap or problem takes place the insurance company will suffice the loss effectively, it is unlikely that it will overestimate the insurance claims or provide with fake bills and reports to compensate for a time when it didn’t receive its due claim.
The director at National SIU, Bob Kiehn is an experienced investigator and has been servicing this industry for more than 20 years now. From liability and bodily insurance claims to life and health claims and public liability, we have you covered for all through our dedicated team of surveillance experts and insurance fraud investigation experts. We catch them, not watch them!