March 25, 2013 by Canadian Underwriter
A third of British small businesses included in a recent survey admit they have already or would exaggerate or fabricate an insurance claim, while one in ten said they would stretch the truth when applying for a policy.
AXA Business Insurance conducted the survey and said it looked at hundreds of small British businesses to understand their views on insurance.
The company said that while most businesses are honest, the number of those exaggerating or fabricating claims could to to tens of thousands per year, with the average claim value being raised by 17%, or £640.
About a tenth of those businesses surveyed said it was okay to inflate the value of goods stolen when making a claim, while a similar number said they would lie about having locked up and alarmed their premises, AXA said.
One in twenty said they would consider it acceptable to fake a whiplash claim or a minor accident at work to make a claim, the company said.
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Among those who said they would exaggerate claims, tradespeople and retailers topped the list, according to AXA’s research. The company also noted that there was no difference between genders in who was likely to fake a claim.
The survey also suggested that small business owners would be 25% more likely to make a fraudulent claim on their business insurance than their personal insurance, AXA said.
Other examples of what small businesses may do in terms of false claims include:
“As an industry we are well aware that these things go on and we do have increasingly sophisticated processes in place to stop them,” Darrell Sansom, managing director at AXA Business Insurance commented in a statement on the survey results.
“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,” he added. “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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