You Rely On”
gest a change in business practice for some unilaterally asserted
reason? Is bank account information identical to previous account
information? Your reservations are warranted even if an account
number is “off” by a few digits.
• Set up a protocol to authenticate transactions with suppliers and
others, particularly when dollar amounts are significant. Establishing a secondary method for authenticating transactions outside of
email communication can make the difference between a lost or received payment, and might also serve to expose any infiltration into
your business partner’s affairs by imposters or rogue employees.
• Delete spam emails; do not open them. Install safety systems on
your email account and use dedicated, not free, email account
• Instead of replying to an important email that could be part of a
scam, forward it to the proper recipient(s) by forwarding the email
to the correct email addressee(s).
• Retain a sophisticated consultant to audit your businesses’
e-commerce practices that relate to computer fraud.
Am I Covered By Insurance?
It depends on a number of variables, including the types of coverage that a business has in place. Start by reviewing your “high
risk” policies to determine the scope of your directors and officers
liability coverage (D/O), crime coverage, and/or cyber-crime coverage. While D/O coverage may exist if the theft is caused (at least
in part) by a dishonest employee, “Man-In-The-Email” fraud and
similar hacking scams are often not covered or are subject to one
or more exclusions. It is reported that most insurers take the position that “Man-In-The-Email” and similar fraud are not covered,
sometimes citing to what is commonly referred to as the “
voluntary payment exclusion.” While not yet legally tested, securing
coverage can be difficult, but not impossible. A careful reading of
your insurance coverage contract is critical. Contacting your agent
and/or obtaining your attorney’s review of coverage purporting to
protect against such losses are good starting points.
New breeds of swindlers and con men have evolved right alongside – and sometimes just ahead of – every other facet of 21st century business practice. Cybercrime can be conducted from physical
locations remote from the injured parties, where the fraudster
need not find a hideout after pulling off a significant job, but simply moves on to his next “virtual” storefront, to infiltrate a fresh
victim’s email server.
For distributors interested in discussing these issues, please contact
Fred at 312-840-7004 or by email at email@example.com.