Fraud is a Top Concern for Business Owners

Roughly 20 percent of business owners recently reported that they are concerned about both internal and external fraud, according to a survey of 1,069 business owners conducted recently by insurer Nationwide.

In fact, fraud ranks right up there with cyberattacks (28 percent), the Affordable Care Act (29 percent) and the tax code (33 percent) when it comes to issues that impact an owner’s ability to protect and secure their business.

The Association of Certified Fraud Examiners calculated in 2016 that the median loss from a single case of fraud cost business owners $150,000, but more than 23 percent of occupational fraud cases resulted in a loss of more than $1 million.

The cost of loss associated with fraud can be especially devastating to small-business owners, who may not have the resources to detect or deter it.

The Many Types of Fraud

Fraud can take many shapes and forms, according to the Association of Certified Fraud Examiners. It can include insurance fraud, corporate fraud, consumer fraud, tax fraud, identity theft and other issues.

Since 2010, Nationwide has processed thousands of external fraud referral cases each year. Many of those cases stem from medical provider fraud, such as false coding of injuries or billing for services that weren’t actually rendered.

Last year alone, Nationwide was able to detect millions of dollars’ worth of potentially fraudulent claims using preventative technologies and predictive analytics.

Deterring Fraud

Nationwide said it helps business owners fight fraud by providing comprehensive loss control training programs that teach them how to uncover potentially fraudulently reported cases of food contamination, employee accidents and other false claims.

This year, the company also released a new anti-fraud solution for business owners called Fraudulent Impersonation Coverage.

The crime insurance product helps protect small- and mid-sized businesses against loss from one of the latest schemes in which imposters manipulate employees into sending them corporate money or goods under false pretenses.

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