Specialty · Insurance Term
Computer Fraud
Definition
Computer fraud coverage is a crime insurance agreement that pays for money or property stolen through someone's fraudulent use of a computer to transfer funds or property. It usually requires that the computer use, not a person's voluntary decision, directly cause the loss.
In Plain English
It is part of commercial crime insurance. A typical example is a hacker breaking into your system and sending money from your bank account. Coverage commonly applies to direct losses, not to data restoration or business interruption.
Losses where an employee is tricked into sending money usually fall under social engineering fraud, which may need separate coverage. Funds transfer fraud covers fraudulent instructions sent to your bank.
Some cyber policies also cover these losses, sometimes overlapping with crime coverage. See cyber liability insurance for data breach and system-related coverages.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: an intruder gains access to a property company's accounting system and sends $50,000 to an outside account. Computer fraud coverage under a crime policy would typically respond, subject to the deductible and terms.
What to Watch For
- Check whether your crime policy includes computer fraud and funds transfer fraud.
- Ask how it coordinates with any cyber policy.
- Use multifactor authentication and payment controls.
- Report suspected fraud to your bank and insurer immediately.
Last updated October 14, 2026 · Primesure editorial team · How We Write