March 27, 2012

An insured, who operates in the Dominican Republic, receives an email from his well-known supplier in Taiwan, stating that instead of transferring payment to the usual account that payment should be transferred to a different account. The email received was from the same email address used by the supplier in previous communications. The insured responds to the email requesting his contact to please send these instructions formally by letter, signed and sealed. The contact provides the letter, with the same signature, letterhead and seal as always and sends this letter scanned by email to the insured. The insured proceeds then to transfer the payment to the new account. The insured later learns that the account does not correspond to his supplier in Taiwan and that somehow his supplier's IT information was hacked and the email and letters received were fraudulent and did not originate from the supplier but from someone else. By this time, the money wired from the insured to the fraudulent account had been withdrawn. Would this be covered under the policy?