Crime Insurance Failing to Keep Up With Cyber Criminal Innovation

New York Law Journal (NYLJ)

PUBLISHED ON: October 5, 2020

Download PDF

While a pandemic continues to rage, it is understandable to lose focus on the continued scourge of computer-enabled theft. In fact, cyber criminals are counting on it. Hackers routinely rely upon a state of distraction and the craft of diversion to hack, scam and steal.

As such, it is useful for in-house lawyers, their counselors, and risk managers to keep in mind that insurance coverage regularly purchased by organizations to protect against crime losses can protect against computer fraud incidents.

The Hacks Keep Coming

In the age of COVID-19, foreign cyber criminals have hacked pharmaceutical companies looking for a coronavirus cure, law enforcement databases have been hacked, criminals have sought to interfere in elections, and (to prove no one is immune), a cyber security firm was hacked as a means of revenge. Most recently, a cyber scam involving Twitter and several of its highprofile users was revealed in which cyber criminals used hacked accounts to perpetrate fraud through a bogus cryptocurrency donor “match.”

Most commercial organizations purchase crime insurance. Although the terms of the crime insurance can vary, almost all modern commercial crime policies contain in the body of the form an express promise of insurance coverage for losses directly resulting from “computer fraud.” Even with the prevalence of computer crime, your trusty crime insurance policy reduces cause to worry, right? Unfortunately, no. Many crime insurance companies.....