Protecting Your Business from Insurance Scams

By | October 1, 2022

No matter the size, businesses must be prepared for illegal and frivolous insurance claims from scammers. And it can be hard to identify who may be running an insurance scam, hoping to get some of your hard-earned money or disrupt your business. The person may be an everyday contractor, the friendly voice on the phone, or the sender of an email in your inbox. In disguise, the person is a scammer, hacker, or fraudster.

Common Insurance Scams

Insurance scams and fraud are common problems. According to the FBI, insurance fraud costs over $40 billion annually. Therefore, knowing that no business is immune to an attack is vital. Scammers are experts at what they do and know how to take advantage of their victims. Also, scammers target businesses of all sizes and locations. And recognizing some of the most common scams is essential:

  • Staged accidents
  • Exaggerated or invented damage
  • Fake injuries
  • Cyberattacks, including malware, phishing, and others
  • Phone scams asking for money or threatening lawsuits, arrest, or other action
  • Email scams like spear phishing, whaling, and others

Insurance Scams Protection Tips

Many businesses think a general liability policy will cover them for insurance scams and disasters. Unfortunately, this isn't always the case. Consider the following tips to help protect your business from insurance fraud and scams.

  1. Identify risk factors and mitigate them.

Each business has different risk factors. And because no single technology can find and prevent all scam attacks, companies should adopt a multilayered approach for defense. These include implementing cybersecurity measures, protecting bank accounts, and ensuring a safe work environment, among others.

  1. Perform employee background checks.

When hiring new employees, it's critical to know that they are trustworthy as well as qualified. A thorough background check can support references and work history.

  1. Invest in coverage to protect your business assets.

In addition to your assets, insurance coverage can also protect against business interruption, natural disasters, and more. Consider an umbrella policy that goes into effect when policy limits are reached. Usually, it's low-cost coverage and, in many instances, a good investment.

Reporting Insurance Scams

Sometimes scams happen quickly, and you can't avoid them. If this happens, you can report the fraud to the National Insurance Crime Bureau or your local FBI office. In addition, the Coalition Against Insurance Fraud allows you to take action.

Explore Your Business Insurance Options

While there are several steps you can take, no measure is foolproof. Be proactive and consider investing in a business insurance policy that provides the proper protection. At Cell Brokerage, we help companies find the right coverage and maximize their policy dollars. Take the next step today. Work with an experienced broker to ensure you have the right insurance to protect your business from the unexpected.

For more information, contact Cell Brokerage today at 844-440-4222.


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