What Insurance Covers Computer Fraud?

Computer fraud is commonly addressed through a crime-policy insuring agreement rather than assumed from a general cyber label. In a Travelers specimen, the computer-fraud agreement covers direct loss of money, securities, or other property caused by computer fraud. The specimen definition centers on using a computer to fraudulently cause a transfer from inside the business or bank premises to a person or place outside them. The exact definition in your policy may be different.

The distinction between computer fraud and social engineering can be important. Some forms require a direct computer manipulation or unauthorized transfer, while an employee being deceived into entering a payment may be subject to a separate social-engineering grant or exclusion. The specimen also separately provides for restoration expenses after certain computer violations, so reimbursement for stolen property and cost to restore damaged data are not automatically the same coverage.

Check whether computer fraud is marked as covered in the declarations, how the policy defines a computer and a fraudulent transfer, what property and locations qualify, and whether authorized-user conduct or voluntary transfers are excluded. Review the per-loss limit, retention, proof requirements, and overlap provisions with funds-transfer coverage.