The Investment Dealers Association of Canada says that hacker fraud isn’t covered by standard insurance policies, and it is considering whether firms with online trading services should be required to carry specific computer fraud insurance.

In a notice to members the IDA notes that, “Concerns about computer fraud have recently surfaced following the discovery of fraudulent trading by outsiders in client accounts with on-line trading capability.”

“We have discussed the issue with the FAS Insurance sub-committee and with an insurer to establish how best to deal with such situations,” it adds. “This notice is to inform members that such computer fraud is not covered under the standard [Financial Institution Bond] policy, which only covers losses caused by fraudulent actions of employees and not outsiders.”

“For such fraudulent losses to be covered, members must arrange for specific computer fraud coverage,” it says, adding that while such coverage is not currently required, “We recommend that members review their FIB policy and consult with their insurance brokers to ensure that they have the desired coverage.”

The FAS Insurance Subcommittee is also considering whether to amend its rules to require members with on-line trading capability to have computer fraud coverage.