Commercial crime insurance is being discussed as an insurance cover that could be sold to large institutions which are at a higher risk of fraud that also has employees involved.
For companies which have been hit hard by fraud perpetrated by its employees in cahoots with outsiders, there is good news.
Commercial crime insurance is being discussed as an insurance cover that could be sold to large institutions which are at a higher risk of fraud by employees. Unlike a fidelity insurance cover where the company gets covered against any dishonest act or fraud committed by an employee, this covers crimes committed in connivance with external parties.
This policy hopes to redress companies which run up liabilities or losses arising out of any court cases to counter fraudsters. Typical, this policy will come into play in a case where a customer's personal details are illegal shared by an employee with an outsider, who uses them for financial gains or to hack into his account.
TL Arunachalam, Director, Global Strategy and Special Projects, Bharat Re-Insurance Brokers said that commercial crime insurance cover takes care of the gap that currently exists in the market. He added that in the recent past, computer-related crimes were on the rise with outsiders being involved in crimes like phishing.
"We are now putting in place an emerging risks practice, which will take into account commercial crimes as well as cyber liability," he said.
Data thefts and leaks of customer information that may then be used for commercial gains have been an area of concern not just for financial services firms but also for companies in sectors like IT. Hence, this cover will be available for all such incidents of crime.The onus of proving that this crime occurred with be on the employer concerned. This would mean that they would have to give details of the employee in question and the extent of financial damages that they have suffered due to the incident taking place. Arunachalam said that even if there is a case of a malware entering the system where an employee clicks on malicious links, this cover can be used to pay for the damages.