Fraud of any kind should not be viewed as an acceptable cost in doing business. Discover 5 tips to mitigate insurance fraud risks in your business.
Veriti Consulting, LLC provides fraud investigation services to organizations across the U.S., and has experience in helping organizations mitigate insurance fraud risks. The firm is also a licensed private investigative agency. Learn more on our insurance fraud and forensic accounting pages or contact us toll free at 855.232.4410.
2. Can Insurance Fraud Be Prevented?
Insurance fraud is a real risk in today’s global
business environment, and businesses of all
sizes can find themselves a target. The
insurance fraud risks increases as businesses
become more complex. While it might not
be possible to completely eliminate the risk
of insurance fraud, it is possible to mitigate
risk and reduce the opportunity for would-
be defrauders to target your business.
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3. Implement Effective
Financial Controls
• Insurance fraud frequently involves employee complicity with
outside parties. Effective financial controls that quickly flag
suspicious activity are one of the better ways to detect, and
deter insider fraudulent activity.
• Experienced forensic accountants can often give businesses
insight into both common and more rare insurance fraud
schemes and insight on how to develop devise and implement
effectual financial internal controls.
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4. Reduce the Opportunity
for Fraud
• Insurance fraud is regularly a crime of opportunity.
• Organizations taking a proactive approach towards eliminating
opportunities can effectively discourage fraud attempts.
• Practical methods of reducing opportunities for fraud include
not only the implementation of controls but also employee
education and awareness.
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5. Perform Regular Audits
• An employee or external party with the opportunity to commit
fraud may be less likely to attempt defrauding the company if
audits are periodically performed outside of the typical rolling
schedule and are designed to target common fraud schemes.
• While internal audits are integral to financial compliance,
external audits should also be utilized to impartially detect
existing irregularities or potential opportunities for fraud or
misappropriation of assets.
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6. Delegate the Responsibility
for Fraud Deterrence
• A clear line of responsibility can ensure that risk minimization
efforts are up-to-date and ongoing.
• A comprehensive fraud deterrence plan can also assist
organizations in investigating and responding to various types of
irregularities that can be early indicators of fraudulent activity.
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7. Partner with an Accounting
and Fraud Consultant
• Organizations that use external consulting partners experienced
in fraud risk management have a better chance at preventing
sophisticated insurance fraud schemes.
• They are also better positioned to detect and minimize damages
in the event fraudulent activities exist.
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