The accountancy profession is open to criminal activity whether that be from internal fraud or from external criminals targeting vulnerabilities in the I.T and fund transfer systems.
Even the most well run, secure businesses face increasing exposure to their systems being hacked by organised criminals for gain. The threat can also emanate from within the company when rogue employees forge invoices, divert funds or steal from the company account.
Crime insurance coverage can differ greatly between policy wordings with variations between insuring clauses. With Lockton's experience and expertise, we are able to evaluate the right policy for you by considering the following critical coverage elements:
Named Perils vs. All Risks
Most Crime policies are structured on a 'named perils' basis. This means that coverage only applies to the risks specifically listed in the policy. We endeavour to place cover for our clients on an 'all-risks' basis, thereby covering loss due to criminal, malicious, or fraudulent acts, both from inside the company, as well as perpetrated by an external third party.
A crime loss rarely ends in the identification of a single underlying cause. Company-wide financial irregularities are often discovered upon investigation which can highlight further issues. For this reason we always try to negotiate crime coverage on an 'each loss' basis and with no aggregate cap.
New External Threats
The emergence of new loss trends involving email and telephone fraud, whereby criminals target procurement processes and human vulnerabilities, are also on the rise. This is particularly true in Northern Europe where criminal activities such as fake CEO scams, invoice fraud and social engineering are increasing in frequency and severity.
Our advice to Aaccountants is to purchase Crime insurance on an 'any one loss' basis with full cover for emerging risks such as social engineering. We will discuss limits and excesses with you, basing our analysis on your peer group and your attitude to risk.