Specialty · Insurance Term
Funds Transfer Fraud (Wire Fraud)
Definition
Funds transfer fraud coverage pays when a criminal, without your knowledge, sends fraudulent instructions to your bank to move money out of your account. It is commonly part of a crime or cyber policy and differs from social engineering fraud, where you are tricked into sending the money yourself.
In Plain English
Funds transfer fraud typically covers instructions sent to your bank by someone pretending to be you, whether by email, phone or hacked online banking. The key point is that you didn't authorize the transfer.
If an employee is tricked into wiring money to a fake vendor, that is usually social engineering fraud, which many policies exclude unless it is specifically added, often with a lower sublimit. Computer fraud is a related coverage for theft that uses a computer to move money or property.
This coverage may sit in a commercial crime insurance policy, a cyber policy or both. Banks may not reimburse business account losses the way they often do for consumer accounts, so insurance and bank controls both matter.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical and simplified: A criminal breaks into a property management company's online banking and wires $90,000 to an overseas account. No one at the company authorized the transfer. Funds transfer fraud coverage may reimburse the loss, subject to the policy's limit, deductible and conditions.
What to Watch For
- Ask whether your crime or cyber policy includes funds transfer fraud and social engineering, and the limit for each.
- Use two approvals and call-back verification for wire transfers.
- Turn on multifactor authentication for online banking.
- Report suspected fraud to your bank and insurer immediately.
Last updated October 14, 2026 · Primesure editorial team · How We Write