Social Engineering Fraud Sublimit

It is the use of deception or manipulation to coerce you or your staff into divulging or transferring personal or confidential information or property. This includes, but is not limited to, actions by another party that intentionally induce a lawyer or their staff to transfer funds or assets to the wrong party or account. For a full definition see Part V (Definitions) of your policy.

Yes, up to a sublimit of $250,000 per claim and in the aggregate. Beginning with the 2024 policy if you take specific steps mandated by LAWPRO you can extend this limit to $1M per claim and $2M in the aggregate. Find the requirements here.

The goal is to ensure that contact and account information is exchanged (yours to the client and the client’s to you) early and ideally at the start of the retainer. As time goes by, chances increase that a fraudster could intercept the emails and commit social engineering fraud.

Your trust account and client’s banking information does not have to be in the retainer agreement provided you have complied with the policy requirements (“…includes instructions for the receipt, release and/or transfer of monies,…”). For example, you could state in the retainer letter that banking information (both the law firm’s and client’s) will be exchanged after the execution of the retainer agreement via a secure client portal or via email within 5 business days and confirmed during an in-person or virtual meeting.

If the steps outlined in Part III (k) of the policy are not taken, you are covered up to a sublimit of $250,000 per claim and in the aggregate, subject to any other provisions in the Policy.

Social engineering fraud usually happens for the purpose of stealing money, but it can be for other illegitimate purposes such as collecting confidential information for a subsequent crime or a fraudster providing you instructions contrary to your client’s intention/best interest.

With respect to your fees, it is still worthwhile to include information instructing the client that they should not expect changes to your banking information and to call you if they get new banking information sent to them. Otherwise, while it may not result in a claim, you may be out of pocket if the payment for your legal fees gets redirected to a fraudster.

No. The Wiring Funds Checklist is an additional fraud prevention tool, but not mandatory to use.

No. The password is suggested in the Wiring Funds Checklist as another measure to prevent fraud, but it is not mandatory to establish.