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With perhaps the exception of ransomware, the largest source of cyber loss for insurance carriers is phishing scams, commonly known as business-email-compromises (BECs), whereby an insured is tricked into sending money by wire transfer to a bank account controlled by a criminal organization. Some losses are seven-figures; some represent death by a thousand wounds. During the last two years, many courts have found for the existence of Computer Fraud coverage for such loss in somewhat complex and sometimes head scratching decisions.
An insured stores activated gift cards worth several million dollars in a warehouse. The commercial property insurer says they’re not covered because they’re “evidences of debt” and the same as currency. Is that true? What about Commercial Crime coverage?
The exposure to loss of money, securities, or other property due to trick, scam, etc. has been around for millennia, but from an insurability standpoint, traditional “ISO standard” insurance products have excluded this exposure as a business risk. Until now.
Agents and insureds often think employee dishonesty coverage on a BOP is the same as coverage provide by Commercial Crime policies or forms. Unfortunately, that’s not the case. This article provides a real-life example of where more is less.
Your computerized telephone system is hacked and the perpetrators ring up $500,000 in unauthorized toll charges. The claim is denied under the property policy, crime policy, and cyber policy. Is there any way to cover this?
Your insured accepted an order via the internet for products that he sells. He verified that the credit card was valid through a service that he uses. It was not until several days later that the service that he uses advised him that the credit card had been stolen. He shipped the product that he sold and is now without the product and lost the income. Is there any insurance product out there to cover this exposure?
Employee theft coverage can easily be written under standard ISO crime forms or an employee fidelity bond. However, crime policies cover only theft of the insured's property by employees. Another exposure many businesses have is the theft of customers' property, on and off the insured's premises, by the insured's employees. How can this exposure be covered, if at all?
​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556

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