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Michigan Farm Bureau Family of Companies
 

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Ways to Reduce Risk

Reduce the Risk of Employee Fraud and Lawsuits

There are a variety of risks that can threaten your company as a business owner. Two of the largest risks include lawsuits and employee fraud which can cause a great deal of stress and are usually expensive losses. We recommend the following tips to help you avoid both these scenarios.      

Six Ways to reduce the risk of employee fraud:  

  1. Institute an anti-fraud policy. A written anti-fraud policy, published in an employee handbook, helps prevent insider theft.  
  2. Educate employees on how to report fraud. Employees need to understand how to report any suspicion of fraud or theft and the guidelines for doing so.  
  3. Incorporate trust within corporate culture. Maintain an atmosphere where employees feel trusted and valued and are rewarded for their loyalty.  
  4. Compartmentalize job functions. When the same person both approves and pays invoices, it is easy for a crime to be committed.  
  5. Consistently review your records. Utilize your accountants to survey employees, asking if they are aware of any fraudulent activities. 
  6. Investigate suspicious employee activity. Your human resources team can help initiate an investigation within the company.  

Five ways to reduce liability resulting from lawsuits:  

  1. Form an asset protection plan. Create a list of potential assets you could lose from a lawsuit compared to your current insurance coverage. Review the plan with both your insurance agent and lawyer to limit your exposure from both an insurance and legal perspective. 
  2. Separate your personal assets from business assets. Although this action won’t limit lawsuits, you might be able to remove your personal assets from a lawsuit settlement.  
  3. Purchase appropriate Liability insurance. Contact your insurance agent to determine which excess coverages can best protect your business.  
  4. Form a risk management plan. Identify and eliminate unnecessary risk within your workplace. From performing repairs to enforcing safe workplace policies. 
  5. Specify your policies. An employee handbook should be available to all staff which clearly lists any policies directed to them, your customers, or the public.  

 

These are a few steps any company can take to reduce their liability exposure. Contact your Farm Bureau Insurance agent today for expert advice on your business insurance needs.  

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