Identity Fraud on the Rise

Identity Fraud / Social Engineering Fraud is the intentional misleading of an Employee through misrepresentation of a fact which is relied upon by an Employee, believing it to be genuine.

It is the fraudulent adoption, alteration, impersonation or corruption of or the theft of the identity of a person. For example the email you have received requesting payment appears to have come from your client, but it is in fact an email from a fraudster manufactured to look like your client and asking you to transfer funds to an account that is not that of your client.

Standard Employee Fidelity / Crime insurance does not cover this risk – Cover is for Employees stealing company money and this is an external person stealing company money. Secondly, Fidelity (and a number of Crime policies) have an exclusion that says if you ‘voluntarily’ hand over the money/transferred the money electronically (despite being deceived or tricked) – there is no cover.

We have already seen a number of our clients suffering losses in this area, with this risk becoming a must for the insurance program to consider.