No one really thinks of fraud being a major agribusiness concern. But when a Georgia-based Temple-Inland, Inc., a corrugated packaging and building products manufacturer, recently found out it was a victim of a $4.8 million fraud scheme, the company became an example of how no industry is safe.

An employee of the company and eight of his accomplices alleged dreamed up and implemented a plot to overcharge the company for timber deliveries and then skim the overage off the top of the company's payment for the non-existent timber. The employee is said to have discovered how to adjust the computer system in the company's scale house so that he could produce two weight readings when one truck passed over the scales, thus creating an extra, fictional load. The employee allegedly secured the involvement of truck drivers to pull off the scheme. In one case, a driver received $910,000 in payments for deliveries when in fact he'd delivered nothing to the mill. The result - Temple-Inland paid close to $5 million for shipments they never received. That's a lot of damage caused by one employee.

Temple-Inland's agribusiness insurance policy, if it contains coverage for employee theft, would cover the loss up to the coverage limits stated on the policy. Still, with agribusiness insurance companies, as with most insurance companies, there's a measure of responsibility that falls on the company to prevent future occurrences. Now that the plot has been uncovered, the company should be putting safety measures in place to prevent a repeat of the alleged crime. Coverage is a great way to mitigate the loss, but agribusiness companies do run the risk of having future claims denied if there is no indication of preventative measures.

When in doubt, talk to your agribusiness broker. Criminals are becoming more sophisticated in their approach. While you may not be able to predict the next incarnation of crime, your insurance broker can help you address potential areas of weakness in your business operations.