The 3rd and final subsection in the policy is focused on 1st party Crime exposures. Money or computer assets that you (the insured) have lost as a result of a breach or deception.
- Under the Cyber Extortion sub section, the carrier pays funds (minus the deductible) to cover extortion payments or expenses from a cyber criminal’s demand. There are several examples of cyber extortion, many don’t make the news but the recent ransomware WannaCry attack is a good example. The common thread of these attacks: the bad guys take control over some important computer system and make you pay $X before they give you back control. Here are some interesting examples from some large companies.
- Under the Electronic Transfer Fraud sub section, the carrier will pay for your loss of funds directed from a financial institution to transfer, pay, or deliver funds from Your Account. This is a situation where the bad guys figure out how to gain access to your financial accounts and steal your money by sending it to themselves.
- Under the Deceptive Transfer Fraud sub section, the carrier will pay for your loss of Funds resulting directly from Your having transferred, paid or delivered any Funds from your account as the direct result of an intentional misleading request. This is commonly referred to as Social Engineering or Confidence Scams – the hacker has essentially exploited common confidence in a party (boss to an employee) in order to deceive you into transferring funds. The classic example is an employee wire transfers money to a vendor per an email request from the CFO but the request was a fraudulent email from the bad guys how have hacked into the email system.
- Under the Telephone Toll Fraud sub section, the carrier will pay for a loss of funds resulting directly from charges you incur for voice telephone -long distance toll calls which were incurred due to fraudulent use or fraudulent manipulation of an Account Code or System password. This is a very specific coverage to deal with the situation where the bad guys have routed all your call traffic through toll number they control resulting in large fees being incurred. The insured would get an unusually large bill from the telephone provider because of the inflated toll traffic.
*Based on policy information provided by: Victor O. Schinnerer & Company, Inc. Every coverage situation is different, and the final outcome depends on the unique facts, law and insurance policy involved. The E&O policy contains reductions, limitations, exclusions and termination provisions that impact coverage for a specific event. Full details of the coverage are contained in the policy