Will Crime Insurance Cover a Fake Vendor Bank-Account Change?

Start with the payment your team actually authorizes

Hypothetical example: A software company's accounts-payable team receives a bank-account update apparently from its development contractor. An employee edits the vendor record, and a manager approves the next payment. The money reaches a fraudster. Nobody accessed the software company's banking credentials or compromised its own network.

Use those facts when reviewing coverage. Ask specifically about an authorized employee sending company money because of a deceptive instruction—not simply about money being stolen electronically.

Chubb's cyber product overview distinguishes computer intrusion, deception directed at a bank, and deception directed at an employee. It lists these under separate cyber-crime headings available by endorsement. Those are Chubb's product descriptions, not universal definitions. The practical lesson is to match the payment scenario to the actual wording.

Sources: Chubb: Cyber Insurance Coverage & Products

Find the coverage grant and the exclusion it changes

Chubb describes a crime-policy endorsement covering vendor impersonation and restoring protection otherwise affected by its voluntary-parting exclusion. That is a product-specific example of why an endorsement matters when an employee willingly transfers money to an impostor. It does not establish coverage under another policy.

For renewal, ask for the relevant coverage grant, definitions and exclusions to be identified together. Treat a missing or unclear answer as an unresolved coverage question, rather than assuming a computer-fraud heading is sufficient.

• Impersonation: Does the wording cover someone pretending to be an existing vendor or supplier?
• Authorization: Does it address an employee approving a payment because of deception?
• Intrusion: Would protection apply without unauthorized access to your own systems?
• People: Do the definitions accommodate outsourced bookkeeping staff who handle payments?
• Exclusions: What restrictions remain after the social-engineering endorsement is added?

Sources: Chubb: Social Engineering Fraud Insurance · Chubb: Cyber Insurance Coverage & Products

Separate vendor verification from internal approval

The FTC recommends confirming suspicious communications using a telephone number already known to be correct—not one supplied in the message. Travelers' guidance, written for financial institutions, similarly emphasizes trusted contact details, consistent procedures and escalation. These are prevention practices, not promises of insurance coverage.

For a SaaS finance team, a useful application is to distinguish two questions: Did management authorize this payment? Did someone independently confirm that the vendor requested the bank change? Two approvals of the same email answer only the first.

Map who receives the request, verifies it, edits the vendor record and releases payment. Include urgent exceptions and staff absences. Then compare that workflow with the proposed policy instead of assuming an internal approval procedure satisfies every insurance condition.

• Does the proposed wording require a particular verification method, and when does it apply?
• Who must complete verification if a contractor maintains the vendor records?
• What documentation is expected, and what would a missed verification step mean for coverage?

Sources: Federal Trade Commission: Cybersecurity for Small Business · Travelers: Social Engineering Fraud and Scams

Record the amount available for this fraud scenario

Coalition's discussion of funds-transfer fraud notes that losses can exceed applicable policy sublimits. Do not substitute the overall policy limit for the amount available under the relevant fraud coverage.

As an internal planning exercise, compare the applicable amount with your largest ordinary vendor payment and with payments that might accumulate before reconciliation identifies a wrong account. This is a way to frame questions—not a universal limit recommendation.

Keep the answers beside the coverage wording in your renewal worksheet. A clearly stated limit is useful only after you have established which coverage provision might respond.

• What limit applies to this exact loss, rather than to crime coverage generally?
• Is that limit per occurrence, an annual aggregate, or part of a shared limit?
• Would several payments following one fraudulent bank change count as one event?
• What deductible or retention applies, and do covered expenses reduce the available limit?

Sources: Coalition: Funds Transfer Fraud: How Coverage Responds

Review cyber overlap without assuming limits add together

Coalition describes coordinated limits and a single highest retention for specified paired surplus-lines crime and cyber products when an event is covered by both. That arrangement is product-specific; it is not a rule for any two policies.

Ask which policy would respond to the employee-authorized vendor payment, how other-insurance provisions operate, and whether separate retentions could apply. Request an explanation tied to the proposed forms.

Also separate stolen money from incident-response expenses. Chubb's cyber overview lists response costs, such as forensic and legal services, separately from cyber-crime endorsements. The practical inference is that coverage for investigating an incident does not itself establish reimbursement of the diverted payment.

Sources: Coalition: Funds Transfer Fraud: How Coverage Responds · Chubb: Cyber Insurance Coverage & Products

Prepare one focused renewal worksheet

Use four columns: payment scenario, relevant policy wording, verification steps and unresolved questions. Have finance describe the process while the person responsible for insurance records the wording questions. Mark each unanswered issue for follow-up before choosing coverage.

When requesting a quote from Atlas Risk Partners, identify employee-authorized vendor-payment fraud as the exposure to review. That keeps the conversation more specific than a request for crime insurance alone.

Availability varies by carrier, state and risk. These insurer examples do not establish Atlas carrier access. This is general education, not an individualized recommendation, and does not bind or establish coverage. The issued policy wording and facts of a loss control.

Sources: Coalition: Funds Transfer Fraud: How Coverage Responds · Travelers: Social Engineering Fraud and Scams