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Brian Hay
Charlie Mullins

SMEs “risking livelihoods” with fraudulent insurance claims

One-in-three small business owners have admitted that they have inflated, or would inflate an insurance claim, a new study by AXA Business Insurance has revealed.

When asked what they would consider “acceptable” when making a claim, about one-in-ten said it was okay to exaggerate the value of goods that have been stolen, while a similar number suggested they would lie about having locked up and alarmed their premises.

Darrell Sansom, managing director at AXA Business Insurance said that many people might think that insurance fraud is a victimless crime, but it's not.

He explained that it is honest customers who end up footing the bill through higher premiums as insurers pass on the additional costs of inflated claims.

The survey found that one-in-twenty would consider it acceptable to fake a whiplash claim or minor accident at work in order to make a claim, while 25 per cent said they would be more likely to make a fraudulent claim on their business insurance than on their personal insurance.

When it comes to applying for cover, one-in-ten said they would deliberately under-value their business to get a lower premium. Around five per cent confessed they would not mention previous convictions, while three per cent said they would not mention previous claims.

Sansom added, "As an industry we are well aware that these things go on and we do have increasingly sophisticated processes in place to stop them.

“However, we also need to educate the minority of small business owners who commit these frauds, whether intentionally or not, that getting caught could mean the end of their livelihood.

“They not only run the risk of having any claim turned down, but also, in serious instances, they risk criminal proceedings and problems getting any insurance in the future."

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