PRODUCT: Social Engineering Fraud Endorsement

COMPANY: Chubb Group of Insurance Companies

BEST RATING: A++ (Superior)

AVAILABILITY: Available to all Chubb appointed agents and brokers.

FOCUS: Added to a crime insurance policy, Chubb’s new Social Engineering Fraud Endorsement is designed to help protect companies from an increasingly prevalent type of fraud: social engineering fraud, when a fraudster purporting to be a vendor or client tricks an employee into making a payment through email, telephone, letter or other means.

According to Greg Bangs, vice president and worldwide crime insurance manager for Chubb, a typical crime insurance policy responds when a third party takes money or securities, but will not insure an organization for such fraud losses. “As organizations continue to seek to improve their computer security, social engineering scams are taking aim elsewhere—at human beings,” he explains. “It’s easy for a thief to pose as a vendor and request by email that a payment be directed to a new bank account. The company may not realize it was defrauded until weeks or months later, when the real vendor sends out an overdue payment notice.”

UNDERWRITING: The Social Engineering Fraud endorsement can be attached to the following commercial crime forms: Executive Protection Portfolio, Health Care Portfolio, ForeFront Portfolio for Not-for-Profit Organizations and Forefront Portfolio 3.0. Clients are required to complete a supplemental Social Engineering Fraud application form, which underwriters will use to underwrite and price coverage. The application will only be required on new business and generally every three years on renewal business. Coverage is available up to $250,000 per occurrence, with no annual aggregate. Higher limits are available to qualified customers. No requirement for vendors and suppliers to carry crime or fidelity insurance to trigger coverage.

MINIMUM PREMIUM: None

TARGET: Coverage is available to nearly all classes of commercial business, as well as non-profit and health care organizations. The coverage is currently not available to casinos, auto dealerships, financial institutions, third-party administrators, labor unions, government entities or pension and welfare benefit plans.

COVERAGE TERRITORY: Status of the social engineering fraud endorsement approvals vary by state. Chubb has applied for approval to offer this coverage in all states that have already approved the four commercial crime forms listed above.

CONTACT: Chris Arehart, assistant vice president and senior product specialist; Chubb Group of Insurance Companies, 233 South Wacker Dr., Suite 4700, Chicago, IL 60606; 312-454-8222.

Amy Skidmore is an IA contributor.