Brokers who solicitors as clients will be well aware of the risk of Friday afternoon frauds. Cyber criminals pose as customers on email and deceive the solicitor in to sending their client’s money to the criminal’s bank account.

Such deceptions are not, restricted to solicitors and could happen to other businesses who might be deceived in to sending goods to the wrong address as well as money to the wrong bank.

So are your client’s covered for:

  • their liability to compensate clients who have lost money due to their deception?
  •  their own losses?

Solicitors’ professional indemnity insurers have paid the majority of the Friday afternoon fraud losses against solicitors as the client’s money has been stolen but would not usually cover theft of the solicitor’s own money.

Theft coverage under a property policy will not of course apply.

If the client purchases a Crime policy it is possible that it has an extension to cover such frauds but many customers do not purchase Crime coverage and a standard Crime policy will usually not provide appropriate protection.

Some Cyber insurance policies may cover such deceptions but many do not and again many commercial customers do not purchase the product.

It is thus advisable for brokers to bring to their clients’ attention that this is an increasingly common fraud for which they have no insurance protection.

If the client is concerned, then they will need to take appropriate security steps to mitigate the risk. Some are outlined here by Legal Business.

Brokers will then need to see how they can purchase appropriate Cyber, Crime or Professional Indemnity insurance to mitigate the client’s exposures.

It’s a tricky area and one I cover in my Intermediate Professional Indemnity, Crime and Cyber technical insurance training workshops.


Posted by Neil Park April 29, 2016