KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Comment on Fraudulent wire and other banking transactions and who bears the loss
April 28, 2026
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Comment on Fraudulent wire and other banking transactions and who bears the loss from article on April 11, 2026
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Ken,
The fraudulent wire transfer scenario described by Anonymous below is unfortunately more and more common today, and stories like this are a big reason companies are purchasing Cyber insurance. Cyber policies with “Funds Transfer Fraud” coverage are built to address exactly the situation described where a person in an insured organization is convinced to transfer funds by an email appearing to come from a legit customer or vendor requesting payment, but is actually a criminal imposter. Many times this is because the perpetrator has infiltrated the victim’s computer or email systems, and has been monitoring and waiting for an opportunity to intercept legit payment communication to reroute it to their own coffers.
In case a company finds themselves affected by a fraudulent transfer, you’re absolutely correct that they should contact their attorney, their banker, and their IT person within the first 72 hours, and sometimes the details of the situation will mean the bank can cover the debit, but sometimes it won’t, and that’s when Cyber insurance with Funds Transfer Fraud can come in.
Not all Cyber policies have Funds Transfer Fraud, and some that do only provide a minimal amount, so it’s a detail that’s worth checking for any company that wants to be protected from these types of threats.
Cyber insurance is surprisingly affordable for companies, but rarely demanded by their customers, so it remains an unnecessarily under-addressed piece of many company’s insurance portfolios. We recommend it to all our customers, and encourage all to consider it.
Thanks,
Larry St John, CIC, CRM
Eclipse Marketing & Insurance Services
Lstjohn@eclipseinsurance.com
707.469.6776 x102
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Response
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Like all insurance, expensive when you have to buy it and well worth it when you need it. insurance, except when mandated by law, is a luxury, a hedge against something you hope never happens. Cyber insurance is relatively new on the insurance scene, obviously, when measured in insurance products, and the significance of having it probably not something you can fully appreciate until you've had an unfortunate experience.
There are measures you can take to protect yourself and you can review what your credit card companies and current insurance offers, as well as your bank. When all fails, you can depend on the fraud protection insurance, if you have it.
Larry is a full service insurance broker listed on The Alarm Exchange. It's worth your time to give Larry a call and find out more about cyber and fraud coverage, including cost and how it works.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com
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