In an era when cyber threats to water treatment facilities are increasingly common, the risks inside the organization may go unnoticed. Water utilities, treatment facilities, and equipment suppliers depend on trust — but even trusted employees can exploit access to funds or data in ways that jeopardize financial stability. Employee fidelity coverage offers an essential safeguard, protecting organizations from theft, embezzlement, and other dishonest acts that can drain resources.
Understanding Employee Fidelity Coverage
Employee fidelity insurance protects businesses from financial losses caused by dishonest acts such as theft, forgery, or embezzlement.
Even one employee’s misconduct — especially in finance, billing, or procurement — can have lasting consequences. For example, a billing coordinator who diverts digital payments or manipulates refund records may cause losses long before discrepancies are detected.
WaterColor Management’s fidelity programs are built for the realities of water utilities, offering tailored protection that covers direct losses and the investigative costs needed to restore integrity after an incident. Our program also extends to exposures that increasingly overlap with digital systems, bridging the gap between traditional employee fraud and cyber misuse.
How Does Cyber Crime Complicate Internal Fraud?
Modern cyber crime has blurred the line between internal and external threats. Phishing emails, fraudulent wire transfers, and system breaches often start with a single compromised employee account — or, in some cases, internal misuse of credentials. Once someone gains access to the system, it’s not always clear whether the activity came from an outside hacker or a trusted employee misusing their access.
The Environmental Protection Agency has also raised an alarm over such vulnerabilities. In May 2024, the agency warned it could pursue enforcement actions against utilities after revealing that about 70% of U.S. water systems were out of compliance with the Safe Drinking Water Act.
Common failures included not disabling accounts for former employees and allowing multiple staff members to share the same login credentials — both of which increase the risk of insider fraud and cyber intrusion.
Key Policy Protections for Water Enterprises
This overlap between internal and external risks makes cyber crime coverage a vital complement to employee fidelity protection. WaterColor Management’s combined crime and cyber crime programs are designed to close these gaps while maintaining affordability and accessibility, giving agents practical tools to help clients stay ahead of emerging threats.
- Employee fidelity/crime: Protects against internal theft, forgery, and embezzlement that can disrupt billing systems, inventory management, or vendor payments
- Cyber crime: Covers losses from fraudulent fund transfers, phishing, ransomware, and business interruption caused by system breaches or data manipulation
Beyond insurance protection, WaterColor programs include proactive resources such as risk-management consultations and a 24/7 cyber breach hotline, helping clients minimize downtime and financial loss.
Together, these layers of support give water businesses a solid defense against fraud and cyberattacks that threaten their operations and credibility.
Helping Clients Prevent Internal Fraud and Strengthen Trust
Insurance agents play a key role in helping clients identify weak points before fraud occurs. Encouraging practices such as dual authorization for fund transfers, routine internal audits, and regular cybersecurity training can reduce exposure. Combining prevention with the right coverage creates a comprehensive protection strategy — one that safeguards financial assets, data integrity, and public trust.
These coverages are available directly or through retail agents, making it easy to tailor solutions to each client’s risk profile. With WaterColor Management’s A+ carrier strength and specialized understanding of the water sector, agents can help clients prevent internal fraud and respond effectively when incidents occur.
Agents can learn more through WaterColor’s employee fidelity programs or apply for crime and cyber coverage to help their clients stay protected from internal and digital fraud risks.
About WaterColor Management
WaterColor Management has insured the water industry for over 30 years. Our policies include unlimited defense cost coverage in the event of a lawsuit against you. Call us at (855) 929-0824 or email info@watercolormanagement.com for a quick quote for your Water Business Professional, Products/Completed operations, Pollution, and General Liability Insurance.