Los Angeles-based Grandpoint Bank is now selling cyber insurance policies to its business customers to provide coverage for wire-transfer and cyber fraud.
Grandpoint, which does business in California, Arizona and Washington, says it is the first bank to market policies of this type.
The Client Cyber Crime Insurance policy is available to business accounts at Grandpoint Bank and its affiliates that include Regents Bank, Bank of Tucson and The Biltmore Bank of Arizona.
The policy s underwritten by Hiscox Inc, on behalf of underwriters at Lloyd’s of London.
The bank said its own affiliate, Grandpoint Insurance Services Inc., has partnered with the insurance agency LBW Insurance & Financial Services Inc. in Valencia to sell the policies.
The bank says the discounted premiums for its customers range from $30 to $70 per month for up to $1 million in coverage.
According to the bank’s description of the policy, it reimburses for losses due to two types of cyber crime: funds transfer fraud and cyber deception.
Funds transfer fraud occurs when a bank transfers funds from a customer’s account based upon instructions that were issued by someone impersonating the customer. The policy provides coverage of $100,000 to $1,000,000 and premiums between $30 to $60 per month, with a deductible of $2,500.
Cyber deception occurs when a criminal poses as a vendor, client or employee and deceives an employee of the company to transfer funds to the criminal. This type of crime is also known as business email compromise. The basic policy includes $50,000 in cyber deception coverage. For $10 more per month, customers can get $100,000 in cyber deception coverage. There is a deductible of $1,000.
The FBI said in April that losses from business email compromise scams surpassed $2.3 billion from October 2013 through February of this year.
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