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Hacked! Commercial Communication Risks

Phone and Internet availability, while vastly increasing the speed of communication in the business world, is not without its own particular risk.

By Diana B. Reitz, CPCU | Updated on February 25, 2013
Phone and Internet availability, while vastly increasing the speed of communication in the business world, is not without its own particular risk. FC&S® frequently receives questions about coverage for financial loss arising from these modes of communication, such as the following:

My insured has two T-1 lines for phone and Internet communications. His normal phone bill for these are about $8,000 to $10,000 per month. The system was hacked into by unknown parties, and a monthly bill in excess of $100,000 was generated during that month.  Where would coverage fall for a claim of this nature?

Absent a special type of coverage for this type of loss, I doubt that coverage can be found for this loss on either the typical crime or commercial property policies.

The standard ISO Commercial Crime Coverage form provides coverage for employee theft, forgery or alteration, theft of money and securities from inside the premises, robbery or safe burglary of other property inside the premises, loss of money, securities, or other property (italicized terms are defined in the form) outside the premises, computer and funds transfer fraud, and money orders and counterfeit money. 

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