February 28, 2020 by Adam Malik
Intact Insurance has updated and expanded its crime coverage to include “social engineering,” which describes a situation in which nefarious online actors dupe unsuspecting employees into sending money or products to criminals.
“What we’ve taken is the crime coverages that we’ve had historically and modernized them,” Mike Kosturik, vice president of commercial lines for Ontario and Atlantic Canada at Intact, explains. “We’ve gotten them up to date.”
Social engineering is now available as an endorsement on commercial policies with Intact. The coverage applies in situations when someone pretends to be a legitimate client or partner of the business in order to trick people into providing confidential information, money or goods to a criminal through digital means.
“That’s an economic crime, an economic loss to the business that in today’s marketplace isn’t being properly covered,” said Kosturik, who is also responsible for commercial lines products nationally with the carrier. “We think that’s absolutely going to be growing as a concern for all businesses.”
He cited Stats Canada research that showed one in five Canadian businesses reported a cybersecurity incident that affected the business in 2017. A 2018 PwC study found that 55% of Canadian companies experienced economic crime in recent years.
Intact noticed recently a rise in claims, including these types of incidents. “We know from our own research that this is part of where things are going,” Kosturik added. “It’s our belief that this is really increasing and will only do so over time. It’s in the headlines every day about some degree of cyber threats to businesses of all sorts.”
Half of Intact’s commercial customers have a crime coverage extension or endorsements in their current policies. However, those cover more traditional losses such as theft, employee dishonesty, and paper fraud (like money order and forgery).
“For the traditional sorts of crime, when you look at it from a historical context, that hasn’t changed much,” Kosturik said. “What we’ve done here by modernizing [crime coverage is to] bring it up to date and [make it] flexible. There are levels to this: We’re not just saying there’s an endorsement called crime; but it has levels of coverages and different elements to it.”
For clients requiring a standalone crimes product, as opposed to an endorsement, such an option will be available through Intact’s specialty lines, he noted. Both are available starting Mar. 1 for new businesses and May 1 for renewals. “We’re offering this just not for small to mid-size business, which is much of what the market is in the Canadian economy, but of course some customers have bigger needs on the limits they want.”