Protection, Fraud and Abuse
Protecting your care home or charity from fraud and abuse
Financial abuse can arise in a number of different ways. Examples are unauthorised cash withdrawals or gifts/possessions/valuables purchased by carers using clients' money.
Careful consideration needs to be made by organisations about how to protect against this abuse. Insurance provision varies in the market but can be arranged around your needs. Some insurers will include contingent cover, for example cover may be included via a Trustees Indemnity policy as an add on, sometimes for free; though the policy’s main intention is to pick up smaller losses, usually cover within a Trustee Indemnity policy is restricted to £50,000 or £100,000 limits and have an excess of around £2,500
on average. This does vary from policy to policy and it is advisable to check the covers available, if at all. A full and standalone Crime/ Fidelity policy is recommend if you wish to have a more comprehensive cover. Crime policies are subject to very strict policies and procedures being followed by the policyholder, if these are not followed they can repudiate a claim.
If you are a brokerage who employs carers or gives advice on care to people receiving individual/personal budgets you need to ensure that Professional Indemnity cover is in place for risks such as the below:
- Errors in advice around benefits available - leading to financial loss
- Potential advice given around bid support
- Potential Employment agency issues if you introduce Personal Assistants - ensuring correct background checks are undertaken such as DBS
- Corporate Appointeeship for those lacking mental capacity, e.g. appointee responsible for making and maintaining any benefit claims on behalf of their client
Fraud against the business
Fraud that occurs directly against the organisation, this could be anything from embezzlement to third party fraud. Organisations can be vulnerable to third party fraud. For example, a large Care provider paid an invoice which they believed to be genuine, but was actually a fraudulent document. The invoice, which was for part payment of the construction of a new care home, was not correctly checked and the account details on the invoice did not match the correct supplier. The invoice was paid but the money went to an unknown account and remains untraceable to date. The insurer settled the claim at over £650,000. It is vital that policy and procedures are followed correctly if a fidelity guarantee or crime policy is in place.
There are many risks that can be protected by appropriate insurance provisions. You should speak to us to discuss your requirements so that the appropriate cover can be provided.
Insurance can't protect against all eventualities (limitations/exclusions) so strong policies and procedures are critical, you should review them frequently and ensure they are being followed to reduce risks.