First-Party Financial Loss Insurance (FPI)

The optional First-Party Financial Loss Insurance (FPI) protects your business against a wide range of financial losses that you suffer yourself – for example as a result of employee mistakes, fraud, cyber fraud, reputational damage or the loss of important work documents.

First-Party Financial Losses – Risks to Your Own Business

Professional Indemnity Insurance primarily protects you when a professional mistake causes financial loss to a client or another third party. But not every business loss involves a third-party claim.

An employee transfers money to the wrong bank account, a fraudulent invoice is paid, fake news damages your reputation or an important specialist suddenly becomes unavailable. In all these cases, your own company may have to bear the financial consequences.

This is where First-Party Financial Loss Insurance (FPI) comes in. It extends your Professional Indemnity Insurance to selected financial losses suffered directly by your own business.

First-Party Financial Loss Insurance (FPI) Protects Your Business

FPI covers a broad range of first-party financial losses caused by employees, third parties or other unexpected events.

For example, the following risks are covered:

• Fidelity loss caused by employees, e.g. embezzlement, incorrect or duplicate transfers, missed cash discounts or certain calculation and data-entry errors
• Fraud by third parties, e.g. fraud, forgery or the deliberate withholding of documents
• Cyber fraud and social engineering, e.g. phishing, CEO fraud, manipulated invoices, payment diversion, fake supplier fraud or business email compromise (BEC)
• Damage to reputation and fake news, including agreed costs for professional PR support
• Alteration or blocking of your own website following unauthorised interference by third parties
• Loss of important work documents, including electronic documents required to fulfil client assignments
• Certain data protection fines, penalties and punitive damages, where legally insurable
• Loss of keys and access cards, including necessary replacement of locks or locking systems
• Loss of key employees, including certain recruitment and temporary replacement costs
• Financial losses caused by employees or freelancers where they cannot legally be held liable for the loss

The module also includes protection for certain claims arising from contractually agreed non-compete clauses in project contracts.

Specialty: Protection Against Internal and External Financial Losses

What makes FPI special is that it does not only respond to one particular cause of loss. It protects your company against very different first-party financial risks – from an employee mistake to sophisticated payment fraud or reputational damage.

For example, if an employee accidentally makes a duplicate payment, the financial loss can be covered. The same applies if an employee is deceived by a manipulated invoice and transfers money to a fraudster.

FPI can also cover additional costs when a key employee is suddenly unavailable or when external PR specialists are needed to limit reputational damage.

Compensation Limits and Deductible

The compensation limits depend on the type of first-party loss and apply within the selected sum insured for financial losses.

For example:

• Competition law / non-compete agreements: up to € 50,000
• Fidelity loss and fraud by third parties: up to € 300,000
• Cyber fraud: up to € 50,000
• Damage to reputation: up to € 300,000
• Alteration or blocking of your own website: up to € 300,000
• Loss of work documents: up to the full FLI sum insured
• Fines, penalties and punitive damages: up to € 300,000
• Domain legal protection: up to € 50,000
• Loss of keys and access cards: up to € 50,000
• Key Person Coverage: up to € 300,000
• First-party financial losses caused by insured persons: up to € 300,000

The deductible for financial losses stated in your insurance policy also applies to the FPI add-on.