Internal fraud · invoice fraud · discovery period
Fraud and deception insurance through Hienfeld
With fraud nothing is broken and nobody is hurt. Only money has gone, and that is precisely the loss most policies do not cover.
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Deze pagina in het Nederlands: Fraude- en oplichtingsverzekering via Hienfeld.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
Work out for yourself what it would cost.
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- We compare the offerings of several insurers
- An adviser checks whether the cover suits your situation
- We arrange the switch, including cancellation
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
Finass acts as an intermediary for the range offered by Hienfeld, an underwriting agent focusing on risks that do not fit a standard policy. We are not tied to this party and compare several insurers objectively. Fraud and deception insurance, also known as crime cover, pays for the money and monetary instruments you lose through deception. That is something other than liability, and something other than a cyber insurance.
The loss comes in two forms. Internal fraud is the employee who diverts invoices to their own account, colludes with suppliers or siphons off stock. External fraud is the forged invoice with an altered account number, the telephone call on behalf of the director pressing for haste, or the supplier who is paid but never delivers. In both cases the act is formally carried out by your own organisation, and that is exactly what makes recovery from the bank next to impossible.
Where it goes wrong is the demarcation. An ordinary money insurance covers money in the event of theft and robbery, not money transferred on instruction. Liability insurance covers loss caused to others, not your own loss. And a director held to account by shareholders for failing supervision needs directors' and officers' liability insurance cover. Three different policies, three different moments.
This page deals with one situation. The full overview is on Compare public and employers' liability insurance (AVB).
What to look out for
Four provisions that are decisive in a fraud claim.
Segregation of duties is a condition of cover
Insurers accept this risk only where there is a demonstrably organised process: the four-eyes principle for payments, separate authority for purchasing, approval and payment, changes of account numbers only after verification through a known telephone number, and a periodic check on supplier details. If you do not meet those requirements when the loss occurs, the payment can be reduced or refused.
The discovery period determines whether you can still claim
Fraud comes to light late on average, often only during an audit or while the employee concerned is on holiday. These policies therefore work on a discovery basis: what is covered is what you discover during the term, provided it happened within a defined period before that. Report immediately on discovery, as Article 7:941 of the Dutch Civil Code requires, even if the investigation is still running.
Consequential loss and reputation stay outside
What is paid is the direct loss. Loss of profit, interest costs, damage to reputation, putting your records right and the time your people spend on the investigation normally fall outside the cover, or are covered only up to a limited amount for investigation costs. Nor are fines and penalty payments insurable. Take that into account when you choose a sum insured.
Fraud by you is never covered
Involvement of the policyholder, the owner or a statutory director rules out cover; Article 7:952 of the Dutch Civil Code provides that an insurer does not pay for loss caused intentionally by the insured. Insurers also almost always require a report to the police and cooperation with the investigation. Without a police report and without auditable records, a claim cannot be substantiated.
What does your premium depend on?
- Size of the organisation: turnover, number of employees and number of payment flows
- How the payment process is set up: authorisations, the four-eyes principle and verification rules
- Number and nature of the suppliers: many changing creditors increase the risk
- International payments: payments outside the eurozone are harder to recover
- Internal controls: audits, job rotation and compulsory holiday
- Sum insured and excess: per event and per insurance year
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | Fraud cover | Cyber insurance |
|---|---|---|
| An employee in accounts payable books invoices to his own account for eighteen months | Yes | No |
| A warehouse worker colludes with a driver and stock steadily dwindles | Yes | No |
| Ransomware brings your systems down and you hire in a recovery specialist | No | Yes |
| After a phishing email your bookkeeper transfers an amount to an unknown account | Provided that | Provided that |
| A supplier collects your deposit and never delivers | Provided that | No |
| The shareholders hold the director to account for failing supervision | No | No |
Money that leaves on instruction is something other than money that is taken away, and something other than an incident in your systems.
Frequently asked questions
This is what people ask us most.
We paid a forged invoice. Is that insured?
Under crime cover that includes external deception it is, provided you have followed the control measures required. What matters is whether the account number was changed without verification through a channel known to you. If that verification was omitted while the policy requires it, that is a reason to limit the payment. Always report the matter to the police and keep the original invoice and the email correspondence.
What is the difference from cyber insurance?
Cyber insurance is about the incident in your systems: ransomware, recovery, investigation, the duty to notify and liability towards people whose data has been leaked. Fraud cover is about the money that disappears from your organisation. With phishing both can relate to the same incident, and it is then important that the policies dovetail rather than point at each other.
Can I recover the loss from the employee who did it?
In law you can hold them liable under Article 6:162 of the Dutch Civil Code, and where there is intent the limitation of employee liability does not apply. In practice there is usually little to recover, because the money has been spent. An insurer that pays out takes over your claim and pursues that route itself. Cooperate with it, because that is an obligation under the policy.
Do I have to report a suspicion straight away?
Yes. Report as soon as you can reasonably suspect that something has gone wrong, even if you do not yet know the extent. Article 7:941 DCC requires timely reporting, and late reporting can prejudice the insurer, for example because payments can no longer be stopped. Discuss engaging a forensic investigator in advance; those costs are not always reimbursed afterwards.
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