Computer fraud

Computer fraud is an insuring agreement in a commercial crime policy. In the ISO crime forms it pays for loss of money, securities or other property that results directly from the use of a computer to fraudulently cause a transfer of that property to someone else. The classic case is a criminal who breaks into your payables system and sends funds out.

One word decides many claims: directly. When an employee is fooled by a spoofed email and approves a payment, insurers have argued that the employee's own act, not the computer, caused the loss, so the computer fraud grant does not respond. Courts have split on that reasoning. Social engineering and business email compromise losses fall into this gap, which is why they are usually bought as an endorsement with a sublimit, or placed in a cyber policy.

Ask whether computer fraud, funds transfer fraud and social engineering fraud are separate insuring agreements with separate limits, and whether the policy imposes a verification condition, such as a callback to a known number, before a payment qualifies.

social engineering fraud: cyber policy or crime policy? compares crime and cyber placements, and commercial crime insurance: what it covers and what it excludes covers the rest of the crime policy.