Important Ruling for Policyholders Victimized by Business Email Compromise (BEC) Scams

September.13.2016

“Business Email Compromise” (BEC) scams are becoming an increasingly prevalent concern for businesses—the FBI reports that incidents have increased 1,300% since January 2015. A federal district court in Georgia recently ruled that a BEC scam in which a fraudster deceived an employee into wiring $1.72 million to an account in China was covered a under a commercial crime policy. The court rejected the insurer’s argument that the wire transfer was not directly caused by the BEC scam, and determined that the policy language was ambiguous about whether intervening events affected coverage, thus resolving the ambiguity in favor of the policyholder. At our sister blog Policyholder Insider, Darren Teshima and Harry Moren discuss why this ruling is good news for policyholders who have fallen victim to a BEC scam.