Marsh UK announced that it has “developed a pioneering new product addressing the fraud and crime risks faced by financial institutions.” Describing the coverage as “the only product of its kind,” Marsh said its new “Crime and Damage Policy has stripped away the traditional named perils approach to fraud protection.”
“Developed by Marsh’s FINPRO (Financial and Professional Services) Practice in London, the policy was created in recognition that traditional solutions were failing to respond to observed losses and provided little or no recognition that new types of fraud are continually being devised, especially the area of economic crime,” said the bulletin.
Aimed at large or more complex financial institutions, the Crime and Damage Policy addresses:
— Dishonest, fraudulent, malicious or criminal acts of employees and third parties. The policy does not impose differential coverage triggers for third-party related ‘crime’, stripping away the traditional ‘named peril’ insuring agreements recognising the introduction last month of the Fraud Act 2006
— All risks of physical loss or damage to an extremely broad definition of valuable property in transit or at rest wherever located.
— Any ‘dishonest, fraudulent, malicious or criminal corruption, deletion or modification of electronic data’, regardless of the computer system that houses such data.
Marsh said that in addition, “this is the first policy of its type that has explicitly addressed losses sustained by banking customers for which a bank is held liable.”
Dean White, a Managing Director in FINPRO,commented: “Traditional crime policies are rapidly becoming less relevant as institutions demand greater dovetailing of their insurance policies with their own risk definitions.
“The enhanced risk identification work required as part of Basel II compliance has highlighted the increasing divergence of traditional coverage and the changing fraud landscape. Recent studies and publications have highlighted the alarming increase in fraud and economic crime. Combating this will be a major priority for the entire financial services sector in 2007 and beyond.”
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