Insurance Marketplace Realities 2025 Spring Update – Fidelity/Crime

Rate predictions: Fidelity/Crime

	Trend	Range
Financial institution bond		Flat
Commercial crime		Flat

Key takeaway

Companies of all sizes and operating across every industry segment are targets for social engineering schemes. Social engineering fraud preys on the trusting and well-intentioned nature of humans. Implementing training for all employees, especially those in positions to initiate or authorize funds transfer requests, and ensuring robust policies and procedures are in place and followed, are paramount to combating this epidemic. In addition to social engineering, mail theft-related check fraud is on the rise with suspicious activity reports related to check fraud nearly doubling between 2021 and 2023.

While it’s important to ensure your control framework is effective, the risk doesn’t stop there. Third parties, especially those processing payment transactions on your or your client’s behalf, are also at risk of social engineering scams.

• Ensure third parties that you contract with carry sufficient fidelity/crime insurance themselves, including a coverage extension for social engineering fraud
• Speak to your insurance broker about these third-party relationships to understand what coverage may exist or be negotiated under your current insurance policies

Social media platforms and smart technologies are quickly becoming a breeding ground for fraud.

• Social media is being used to exploit gaps in a financial institution’s policies and procedures by quickly reaching a large audience of fellow fraudsters, compounding the crime and the resulting loss
• Bad actors can easily access personal details, allowing them to impersonate individuals and/or craft convincing and targeted scams
• Deepfake audio, also referred to as voice cloning, uses artificial intelligence to replicate a familiar person’s voice to deceive victims into revealing sensitive personal information or sending money

Fueled by mail theft, check fraud is a growing exposure for businesses and consumers.

• Fraudsters take advantage of regulations requiring financial institutions to make the funds of deposited checks available within specified timeframes. The specified timeframe is often too short a window for the consumer or financial institution to identify and stop the fraud
• To make the checks appear legitimate, fraudsters use check washing and other techniques to alter checks or create counterfeits. In other instances, checks are deposited with forged endorsements.

To read more, download the full report below.

Disclaimer

WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).