Fraudulent Documents – Who Bears The Cost?

Fraud remains an ever-evolving risk and we continue to see forged and fictitious documents being used to deceive financial institutions.

Against a backdrop of a number of high-profile cases in recent years¹ we set out here to review our proprietary claims data and to examine the insurance cover available to financial institutions under the crime/bankers blanket bond and/or Professional Indemnity (PI) policies.

What are fictious and forged document claims?

Generally this type of claim encompasses forgery, counterfeiting or fraudulent alteration of specifically defined documents which have been relied upon by an Insured institution in the course of business. However, the policy wordings are precise, and it is necessary to test if the exact fact pattern falls for cover. Crime policies can also provide coverage for certain costs that an Insured may incur following discovery of a fraudulent act – we discuss this further below.