By: Commercial Crime Concepts (C3)
Commercial Crime Concepts (C3) has introduced a welcome new extension to its commercial crime product, third-party impersonation fraud cover. The extension covers a company against loss of money that may result when an employee, in good faith, transfers funds from the insured’s account or amends the details of a third-party in the insured’s EFT payment system.
The extension has been introduced in response to broker requests.
“The type of scenario covered by the extension is generally not covered by commercial crime policies,” says C3 director Gail Carver. “Due to the fact that losses of this nature are common, it was a no-brainer that we needed to service the needs of our brokers and their clients.
“We have been pleasantly surprised by the enthusiasm with which the extension has been received by the market and it has become a great differentiator for our business.”
Impersonation fraud comes about when an unauthorised person claims to be authorised and issues a financial instruction based on that fraudulent authority. This person could purport to be a director, officer or other employee of the insured organisation itself, or a customer, supplier, service provider, adviser, etc. who has a legitimate agreement with the insured company.
“Many, if not most companies have processes in place to verify the authority of a person before executing a financial instruction on their behalf,” says Carver. “These include calling the person back using the number on file or via a number in the public domain; verifying the email address of the sender; or requesting a bank letter, statement or cancelled cheque reflecting the account details in question.
“However, despite all these measures, companies are still vulnerable to impersonation fraud.”
In the case of third-party impersonation fraud, the C3 policy covers up to 90% of the available limit of indemnity for the loss, depending on the identity verification process that was followed.
“Clients are expected to make every effort to validate the identity of the person making a request before proceeding with the transaction,” says Carver. “Failure to do so will result in a reduced pay-out percentage.”
Third-party identity fraud cover is available right now through Commercial Crime Concepts in partnership with Lombard Insurance.
“We are obviously on hand to assist brokers in providing the best advice to their clients when it comes to this and all our other commercial crime products,” says Carver.
This product is available as both an extension to an existing policy or as a stand-alone product depending on the needs of the client.