Call Us Today For A Free Quote | 866.940.1101
Professionals Insuring Professionals
 

During a closing on a real estate transaction, cyber criminals sent new instructions via e-mail for sending the monies.   Insured did not verify by a phone call or other means that the new instructions changing the account numbers was correct.  $150,000 was sent to the cyber criminals via ACH as a result and the money is gone. 

Fortunately for the insured, there was coverage for fraudulent wire transfers up to $150,000 per claim and per policy year.  This happened 3 months into the policy.  To save money at renewal, against our advice, the insured had dropped coverage for much higher limits.  Good news is the insured was made whole.

No carrier writes a standalone short term policy for this type of coverage.  Because of the recent loss the cost of adding even an annual policy for this coverage will be much more expensive than if the old coverage had been maintained.  Whether a stand-alone properly endorsed Cyber policy or a properly endorsed Crime is obtained, they will be written on a claims-made policy form.  This means that the coverage will remain inforce only for as long as continuous claims-made coverage is maintained.

The insured’s thought process is that normally knowing of claims for these types of losses is fairly quick.  Bad news is that the only carriers that will write coverage after a recent claim will be in the surplus lines market place.  Claims-made coverage make terrible short term policy coverage vehicles.  So if insured ways to only ‘temporarily’ obtain coverage, many surplus lines policies only permit the insured to purchase an Extended Reporting Period Endorsement (ERP) if the insurer is unwilling to provide renewal terms. 

End result is that for saving a few hundred dollars at renewal, insured is now faced with purchasing additional coverage that will likely cost a few thousand dollars.  If insured wants to protect these past acts past the expiration date, the insured will be looking at a few thousand dollars more for the ERP.

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version
Quick Contact
Referrals
We love referrals! And thank you even more for your continued business.
Customer Service
Self policy service any time of the day, directly from our website.
Join Our Newsletter
Stay in touch with the latest events, news and offers we have.
From Our Blog From Our Customers
Read More Read More
Stay In Touch With Us Helpful Site Links Read the News
Sign up now to receive new and updates Stay up-to-date with the latest industry, community and agency news through our newscenter. We also provide handy hints on how to save on your insurance.

Read More
We have the expertise to find you the right coverage at the right price 
Powered by Insurance Website Builder