The holiday season brings increased sales, higher transaction volumes, and operational pressure. It also creates the perfect environment for financial crime. While many businesses focus on external threats, holiday fraud often comes from a combination of cash exposure, check fraud, cyber-enabled crime, and internal vulnerabilities.
Understanding where fraud really comes from—and how crime insurance responds—is essential to protecting revenue during the most financially active time of the year.
Cash Exposure Increases Under Pressure
Holidays often mean more cash on hand, faster transactions, extended hours, and temporary staffing. These conditions reduce oversight and increase opportunity for theft, skimming, and errors.
Cash handling protocols that work during normal operations may break down when volume spikes. Drop safes, dual controls, and regular reconciliation become even more critical during this period.
Check Fraud Is Still a Major Threat
Despite the rise of digital payments, check fraud remains one of the most common and costly holiday fraud schemes. Forged signatures, altered amounts, counterfeit checks, and intercepted mail increase during year-end payment cycles.
Vendors, payroll, bonuses, and refund checks create multiple points of exposure. Many businesses underestimate how quickly losses can accumulate before fraud is detected.
Cyber Fraud Enables Financial Crime
Cybercrime is no longer separate from financial crime. Phishing, social engineering, credential theft, and email compromise are frequently used to initiate fraudulent wire transfers or ACH payments.
Holiday distractions make these schemes more effective. Fraudulent emails disguised as vendor requests, shipping notices, or internal approvals often succeed when employees are rushed or short-staffed.
Employee Dishonesty Is Often the Costliest Loss
Internal fraud remains one of the most damaging exposures for businesses. Employees have access, knowledge, and trust—making theft harder to detect and often more expensive.
Holiday stress, financial pressure, and temporary staffing can increase the risk of employee dishonesty. Fraud schemes may continue for weeks or months before discovery.
Third-Party and Vendor Fraud Grows at Year-End
Vendors and service providers also present risk. Fake invoices, altered payment instructions, and impersonation schemes increase during busy periods when verification steps are skipped.
Businesses that process high volumes of vendor payments are especially vulnerable if approval controls weaken under time pressure.
Why Standard Property and Cyber Policies Are Not Enough
Many businesses assume fraud-related losses are covered elsewhere. Property insurance typically excludes theft of money and employee dishonesty. Cyber insurance may not cover financial loss unless specific fraud endorsements apply.
Crime insurance is designed to fill these gaps, addressing losses from theft of money, securities, forgery, employee dishonesty, funds transfer fraud, and computer fraud—when structured properly.
Crime Policy Limits Often Lag Behind Exposure
As businesses grow, crime limits are often left unchanged. Increased revenue, payroll, transaction volume, and electronic payments all raise potential loss severity.
Holiday activity magnifies this gap. A limit that seemed adequate earlier in the year may be insufficient during peak financial periods.
Controls Matter to Coverage and Claims
Insurers expect reasonable internal controls. Segregation of duties, approval processes, callback verification for payment changes, and documentation all affect claim response.
Weak controls do not always void coverage, but they can complicate claims and delay recovery.
Early Detection Reduces Loss Severity
The longer fraud goes undetected, the larger the loss. Regular reconciliation, exception reporting, and employee awareness are critical during the holidays.
Prompt reporting also improves the likelihood of insurance recovery and reduces disputes.
How Skyscraper Insurance Helps Protect Against Fraud
Skyscraper Insurance works with businesses to identify where financial crime exposure exists and whether current crime coverage responds appropriately. We review policy limits, definitions, exclusions, and internal processes to ensure protection matches real-world risk.
Our goal is to help businesses safeguard cash flow, reduce surprises, and protect profitability during high-risk periods.
Don’t Let Fraud Steal the Season
Holiday fraud is predictable, preventable, and insurable—but only when addressed proactively. Cash, checks, and cyber fraud all increase when businesses are busiest.
Now is the time to review crime coverage, strengthen controls, and ensure your business is protected when exposure is highest.
