Insurance Coverage: Do You Have Adequate Fraud Protection?

The nature of fraud protection is changing. Computer hacking has moved from the realm of thrill seekers to those looking for financial gain. From attacking large corporations and government entities because it makes the news to targeting small and mid-sized businesses where security is easier to penetrate, it’s easy to see why the FBI has made cyber crime its third highest priority after terrorism and counterintelligence.

Here’s how easily it can happen. A company employee surfs the Internet during his lunch break and unknowingly downloads a malicious program onto a computer that’s connected to your company’s credit card server. The “Trojan horse” exports several thousand credit card numbers and related information about your customers before it’s discovered. The information is sold to individuals who use it to create fraudulent cards and make fraudulent purchases. Your company receives four claims totaling more than $100,000 as a result of the data breach.

Of course, there are steps you can take to protect your business, but truly good risk management goes beyond preventative measures and reduced exposure. After all, computer viruses are blind to the size or prominence of a company. The cost to your business to indemnify individual victims or financial institutions, or even to cover your court fees if a suit it brought against your company, could be staggering. The best defense is a combination of tactics: internal controls, check and Automatic Cash Handling security, period audits, and a strong partnership with your financial institution and insurance provider.

Consider Adding Fraud Insurance

Fraud insurance is designed to be a final layer of protection for your business should it become the victim of some type of fraud or cyber-crime. If you haven’t already done so, seriously consider adding it to your company’s protection package. Look for a provider who:

• Offers one-on-one consultations and a full review of the fraud-related exposures specific to your business.
• Explains how fraud coverage products dovetail your current insurance program.
• Presents a comprehensive proposal for insuring your business against fraud exposures.
• Has access to a comprehensive list of insurance products.
• Is reputable and respected in the industry.

A number of products are available to help protect your business. These include Computer Crime Coverage, Funds Transfer Fraud Coverage, Personal Accounts Protection, Claim Expanse Coverage, Fidelity Coverage, Forgery or Alteration Coverage, On Premises and In-Transit Theft, Disappearance or Destruction Coverage, and Money Orders and Counterfeit Money Coverage. Talk with your insurance provider to see which products they offer and what recommendations they have for creating a policy tailored to your business’ current and future needs.

Stay on top of the latest cyber-fraud threats. Visit www.johnsonbank.com/about/news/fraud.htm