Jenner & Block

Insurance Law Update: "Can Computer Crime and Fraud Insurance Policies Extend Coverage to Sophisticated Phishing Scams?"

Policyholders should review their Computer Crime and Fraud Insurance Policies and understand whether they could be interpreted to apply only to traditional hacking crimes involving direct access to a computer system, rather than sophisticated new forms of email “phishing” scams involving a fraudulent scheme to induce the transfer of funds.  To the extent the policies may limit coverage to direct hacking, policyholders should consider obtaining additional stand-alone cyber liability insurance to cover these emerging phishing attack risks and other cyber crimes where funds are voluntarily transferred by employees through fraudulent inducement.