Many cases of fraud involve insiders like employees who steal money or forge cheques.
How to prevent this? Overseas, it is common for employees in sensitive positions to be covered by fidelity bonds. These are in fact of form of insurance to cover losses from employee fraud. I understand that this is not common in Singapore. The Law Society has professional indemnity insurance which protects law firms against negligence suits and fraud by employees but in the past, it did not cover fraud by the partners of the law firm. Not sure about the situation now.
So what should you do as HR manager? One possiblity, which is also quite novel, is to require a potential employee to obtain a guarantor who is a close friend or relative. This guarantor will promise to be liable for losses caused by the employee's dishonesty. This measure will face some resistance from employees. Also, whether the guarantee works in the end depends on many factors, including the guarantor's financial capability at the time of the claim.
How to prevent this? Overseas, it is common for employees in sensitive positions to be covered by fidelity bonds. These are in fact of form of insurance to cover losses from employee fraud. I understand that this is not common in Singapore. The Law Society has professional indemnity insurance which protects law firms against negligence suits and fraud by employees but in the past, it did not cover fraud by the partners of the law firm. Not sure about the situation now.
So what should you do as HR manager? One possiblity, which is also quite novel, is to require a potential employee to obtain a guarantor who is a close friend or relative. This guarantor will promise to be liable for losses caused by the employee's dishonesty. This measure will face some resistance from employees. Also, whether the guarantee works in the end depends on many factors, including the guarantor's financial capability at the time of the claim.
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