Fraud in companies is not an uncommon occurrence. Fraud insurance protects companies from financial losses within their own organization that result from fraudulent acts committed by employees or third parties. But why is it so important?

Economic crime, often referred to as white-collar crime, remains an underestimated but costly threat to companies worldwide. The latest KPMG study, “Global Profile of the Fraudster” (2025), reveals an alarming pattern: Most perpetrators are not external hackers or anonymous fraudsters—they are long-term, highly respected employees who exploit their employers’ trust. 55% of cases involved collusion, often in groups of 2 to 5 people. Departments such as finance, procurement, and executive management —where authority and access to resources are greatest—are particularly affected.

But how do these perpetrators manage to remain undetected? The study shows that weak internal controls are the main cause of fraud. At the same time , tips from whistleblowers are the most effective method of detection. The most common offenses? Misappropriation of assets (52% of cases), forged documents (29%), and procurement fraud —often through collusion with external service providers.

Recent Cases of Fraud: When Trust Is Abused

The headlines in recent months have been alarming: The media are increasingly reporting on spectacular cases of employee crime at German companies. For example, a supermarket employee used returned empty bottles to feed them back into the deposit machines and redeem the generated receipts at the self-checkout— resulting in a loss of 3,500 euros. The fraud was only discovered when a store detective became suspicious.

Another case:A cashier at IKEA manipulated cash register reports to embezzle money. The exact amount of the loss has not been made public, but the case shows that even in large, established companies with seemingly stable processes, insiders can commit fraud due to inadequate controls. Such cases often go undetected for months or years.

In addition to the risk of fraud by so-called internal perpetrators, companies also continue to face external threats. These threats can arise from fraudulent orders, fake emails containing a false IBAN, or phishing attempts. These threats are on the rise due to the increasing use of AI.

Why Trade Credit Insurance Is Not Enough

In the event of fraud, companies are not covered by existing trade credit insurance. Trade credit insurance protects against bad debts resulting from a customer’s insolvency or bankruptcy—that is, when existing receivables go unpaid. It does not apply, however, if an employee defrauds the company. Furthermore, it does not cover unauthorized claims, such as when a supposed customer turns out to be a fraudster and then embezzles the goods. This is where fidelity insurance comes into play: It covers financial losses resulting from intentional acts such as fraud, embezzlement, or theft. Depending on the contract, it covers not only losses caused by the company’s own employees but also fraudulent acts by external third parties—such as “fake president” scams or order fraud.

Given the increasingly sophisticated nature of fraud strategies, it is becoming an indispensable element of risk management. For many companies, the question is not so much whether such a risk exists, but rather how well prepared they are to deal with it.

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