I'd just like to share a quick story. This actually happened to us recently. An email from the agency owner came into our CFO's inbox instructing him to wire money into the owner's new bank account. The owner's email was accurate but the CFO became suspicious only for the reason that the owner has never asked him to do this before. He called the owner to verify and quickly found out is was bogus.
I found out this is what's called social engineering fraud - where a person through deception gains the confidence of someone who is posing as a trusted vendor, client or employee and inducing them to part with money or securities.
Frauds of confidence or deception can be difficult to detect and could result in a company handing over tens of thousands of dollars to a criminal without even realizing it - until it's too late. They are happening more often. And smaller companies are often the most vulnerable because they may lack the financial or wire transfer controls that larger companies routinely use.
And guess what? This type of fraud may be excluded in your typical crime insurance policy and may not be covered through a cyber liability insurance policy.
Crime policy may have what they call a "voluntary parting exclusion" where this type of fraud may fall under and is excluded. And cyber liability policies will protect you against the unlawful access of personal information and data but not money or securities.
Good news is that there are companies that can protect you against this type of fraud. It may be a good time to take a closer look at your crime policy and see if this is covered.
Andrew Bell is a Business Insurance Consultant with Joyce, Jackman & Bell Insurors and has focused on working with business owners and top-level executives across the country, assisting them in managing their insurance programs. This includes property, liability, workers compensation and employee health benefits.