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Preventing Fleet Fraud | Business Insurance Policy

Fleet fraud is costly. A staged accident or injury claim by an employee can mean expensive payouts and increased business insurance policy premiums, so it is essential that your business take steps to prevent and detect employee fraud. Anti-fraud measures and internal controls can and should be designed and customized for each individual organization based on its unique characteristics.


In addition, stay alert for drivers these red flags:

  • A history of prior accidents of similar circumstances
  • Multiple past claims with the same attorney
  • Demonstrates familiarity with claims process and claim evaluation
  • An overly enthusiastic witness present at the accident scene

Fleet management programs that include a fleet safety policy are most successful at preventing fraud when they cover the following areas.

  1. Management commitment:  Clearly define management’s role and commitment to preventing and detecting fraudulent business insurance policy claims. Most perpetrators of fraud engage in illegal conduct only when they perceive that they will not be caught.
  2. Written policies and procedures:  Clearly document all permitted driving behavior, along with proper procedures to follow in the event of an accident.
  3. Driver agreements:  By getting a driver’s written commitment to conform to all policies and procedures can actually help deter aberrant behavior. Deterring occupational fraud starts by an organization creating a perception in its employees’ minds that illegal acts will be detected.
  4. Motor vehicle record checks:  Conducting a motor vehicle record check, in addition to a standard background check, can expose any suspicious driving or claims patterns before hire or before company vehicle use privileges are extended.
  5. Crash reporting and investigation:  Conduct thorough investigations of each claim. Provide forms for employees to complete in the event of an accident.
  6. Vehicle selection, maintenance and inspection:  Conduct regular inspections to demonstrate the organization’s commitment to preventing accidents and fleet fraud.
  7. Disciplinary action system:  Make the repercussions of fraud clearly serious, including legal action and termination. Adopting concealed internal controls may assist in detecting fraud, but it generally does NOT prevent fraud because employees are unaware of their presence and potential detective ability.
  8. Reward and incentive program:  Reward employees for good driving habits and lack of accidents and claims.

For any business operating vehicles under a fleet motor insurance policy, it is important to demonstrate to an insurer that adequate fleet procedures are in place to minimize costly risks—including occupational fraud. For more information about controlling you business insurance policy costs, contact the professionals at ARCW Insurance today.