IT Firms are responsible for managing other businesses’ personal and confidential data and for processing a heavy amount of transactions. With that being said, these technology companies are exposed to a wide range of risk exposures. Even more so, white collar crimes that takes place inside a firm are just as big of a threat as outside exposures. Therefore, ensure your clients are secured with a comprehensive IT Crime Insurance Package and share the following preventative measures with them.
White-collar crime includes lying, cheating and stealing in a business setting. These crimes cost the U.S. $300 billion annually, according to the Federal Bureau of Investigation (FBI) and some of these losses are sustained by small businesses, says Legal Zoom.
So, how is it prevented? First and foremost, implement a system of checks and balances. Without the proper internal controls, your clients are subject to suffering embezzlement, money laundering, and even tax evasion charges. Even if your clients’ have small businesses, getting away with a simple $100 fraud scheme can motivate the perpetrator to attempt larger schemes. Therefore, require two signatures on all company checks and hire an outside auditor to prevent this.
Next, it’s important to be truthful about finances. In times of recession, small businesses are hit hard by cash-flow problems—money is coming in, but clients have delayed payment because of their own financial issues. This leads small businesses to seek loans and when presenting the financial picture of the business, to stretch the truth about their finances to a point that reaches fraudulent representation, says the article. While the economy is constantly fluctuating, never misrepresent the figures fraudulently. A mistake like this could cost the entire company to go under, so ensure the books are straight.
At Domenick and Associates, we specialize in protecting small to midsized IT firms. Our coverage is custom tailored with your clients in mind to guarantee them the best protection. For more information about our products, contact us today at (855) 745-3636.