Recent Scam - Social Engineering Fraud Endorsement

Gallagher Healthcare :: Industry Insights

By Gallagher Healthcare | 9/30/2015

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In recent weeks, a number of our clients have experienced scams that all have similar characteristics. The following is a representative example of the sort of activity we are seeing:

Our client’s CFO received what appeared to be an email from the company CEO instructing him to wire funds to another bank to support a proposed real estate transaction. Everything about this email appeared authentic and the request was not out of the realm of normal business transactions for our client, but it soon became clear that the email was sent from a third-party thief.

This is a relatively new type of scam that all companies need to be aware of. We recommend that all of your management staff be on alert and that financial transactions should be verbally confirmed.

This is not a claim covered by your Cyber policy, but it is potentially a Fidelity/Crime claim that can only be covered by a “Social Engineering Fraud Endorsement” under the Crime policy. Unfortunately, this endorsement is only available from a few carriers. In some cases, your carrier may not provide this coverage and your policy may need to be substituted with a company providing this endorsement.

If you are interested in pursuing this coverage, please contact a Gallagher adviser to discuss options.