Will Your Insurance Cover An Email Scam?

By on January 31, 2019

January 31, 2019

Business Email Compromise, or BEC, is a growing business for a few scammers and an increasingly common problem for businesses large and small. The latest iteration is said to involve an agile two-step, the first being a hack at a company’s vendor, the second being a phony invoice from that vendor to the company, requesting payment to what turns out to be a fraudulent bank account. The question of insurance coverage for victims of these scams under conventional crime insurance is now an active litigation issue, as explained in this post from Barnes & Thornburg. Decisions in some cases have turned on the meaning of the term “direct loss,” with the carriers arguing that the claimant has cooked its own goose so to speak by doing the scammer’s bidding. Recent court decisions have favored policyholders, but they are advised to expect resistance to these kinds of claims going forward. In the meantime, there are ways for insureds to strengthen their position, both before and after the fact.


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