Crime Policy Does Not Cover Loss of Company Funds Resulting from Social Engineering Scheme

By | C-Suite Risk Report | October 24, 2016

In a long-awaited decision (at least by the parties and fidelity law practitioners) the Fifth Circuit Court of Appeals has held that a “Computer Fraud” Insuring Agreement in a Crime Insurance Policy does not cover the insured’s loss after its employees were tricked into wiring approximately $7 million to a fraudulent bank account set up by criminals posing as one of the insured’s trusted vendors.

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Computer Fraud Provision of Crime Policy Does Not Cover Loss from Business Email Compromise and Social Engineering Scheme

By | Executive Summary Blog | October 24, 2016

Applying Texas law, the United States Court of Appeals for the Fifth Circuit has held that a business email compromise loss involving social engineering did not “result[] directly from the use of any computer to fraudulently cause a transfer” and thus did not trigger Computer Fraud coverage under a commercial crime insurance policy. 

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