Why take out an insurance against business fraud?

According to our latest study on business fraud in the Benelux, Belgian and Dutch companies are becoming victims of fraud and scams more frequently. 78% of companies have suffered fraud attempts over the last two years compared to 69% during the previous year's survey.

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Fraud exists in all businesses and no sector of activity is spared. Whether you are an SME or a large company, you are not immune to one or more fraud attempts and these can have serious consequences for your business.

Since the crisis of the coronavirus, the increase in remote work offers fraudsters additional opportunities. Employees are more vulnerable at home. They don't have colleagues near to them for advice in a doubtful situation.

Still most fraud is committed by in-house employees. The number of cases of internal fraud (attempts) is rising. In the Netherlands, the increase in 2024 was still limited at +4%, in Belgium the increase was +18%.

Contrary to popular belief, the most common external fraud is not the cyberattack. It is the identity fraud that outpaces all other forms of external fraud. There are different types of identity fraud like the fake buyer fraud, fake supplier fraud and CEO-fraud.

Fraud, perfectly hidden and usually not detected until late, inevitably leads to heavy financial losses. According to our latest fraud survey, the financial impact is increasing: 39% of internal fraud and 44% of external fraud hole losses of more than €100,000.

Even companies with strong internal controls are vulnerable to fraud. A large portion of reported fraud comes from well-intentioned employees who have been deceived by fraudsters. Vigilance is required. A single mistake on the part of an employee and everything can change.

Directors or boards are obliged to take all necessary measures to protect the interests of shareholders. They can be held liable if they have not insured the company's assets with fraud insurance.

The overall picture emerging from the 2025 survey is that companies and organisations are increasingly taking technical measures to prevent fraud. Yet fraud remains a major risk, and companies remain vulnerable to both internal and external fraud.

Cyber insurance does not protect companies against digital fraud. They only protect against:

• damage caused to the system by a cyber attack;
• liability;
• business continuity damage.
  

For example, damage caused by a fake invoice sent by a fraudster by e-mail is not covered by cyber insurance, but it is covered by fraud insurance.

A fraud insurance protects companies against damages caused by internal and external fraud. Companies with fraud insurance are three times more likely to recover at least 60% of their financial losses than uninsured companies, which recover less than 20%.