As many readers are aware, there have been a number of recent case decisions addressing insurance coverage issues arising out of social engineering fraud, sometimes known as payment instruction fraud. The recent round of judicial decisions includes a ruling by a Canadian court. In the following guest post, Jamieson Halfnight and Anne Juntunen of the Lerners law firm in Toronto review the recent Canadian decision and discuss it in the context of several recent rulings in the U.S. I would like to thank Jamie and Anne for their willingness to allow me to publish their guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Jamieson and Anne’s guest post is set out below.
Continue Reading Guest Post: First Canadian Cyber-Coverage Decision Joins Series of U.S. Judgments on Social Engineering Frauds
One of the more vexing threats in the current business environment is the rise of “social engineering fraud” or “payment instruction fraud.” In these schemes scammers using official-seeming email communications induce company employees to transfer company funds to the imposters’ account. Among the many issues involved when these kinds of scams occur is the question of insurance coverage for the loss. In many instances, insurers take the position that because the schemes do not involve a “hacking” of the company’s systems and because the actual funds transfers are voluntary, the loss of funds is not covered under commercial crime policies.