Inside: Email fraud is on the rise: Is your crime coverage ready?

Do not be fooled by thinking this type of email-intercepting scam could not happen to you

The Federal Bureau of Investigation (FBI) has issued a new warning as to an email scam aimed at U.S. businesses. The scam is so simple that it is hard to believe, but that is why it works. Worse yet, once the business loses its money, recouping it through a bank or insurance carrier can be extremely difficult.

The scam works through the criminal getting into the middle of your email traffic. The fraudster intercepts legitimate emails, and then creates a fake one that is nearly identical. In many instances the fake email is merely one letter changed or added to the legitimate address.

If you think a crime insurance policy will save the day in these instances, think again. The potential for coverage is there, but it is not easy since coverage is very dependent on the facts of each scam and how it is perpetrated.

Crime policies do provide what initially looks like an impressive scope of coverage: a) employee theft; b) forgery or alteration; c) theft from your premises; d) theft while your money is in transit; e) fake money orders and counterfeit money; f) computer crime; g) funds transfer fraud; and h) personal account protection. But as with any contract, the devil is in the details. Most of these coverage terms are specifically defined in the policy. The definitions can specify the type of fraud, the required location of the crime, and who must be involved in the scam or crime in order for coverage to exist.

Contributing Author

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Collin J. Hite

Collin Hite is the practice leader of the Insurance Recovery Group at Hirschler Fleischer, P.C (Richmond, Va.). He handles insurance recovery and coverage litigation nationally...

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