A spoofed email diverted a payment, or a claim arrived after my E&O stopped

Written for independent consultants, fractional executives and small consulting firms that use employees or subcontractors.

The short version

1. Verify every bank-detail change by phone.Before money moves, call to confirm. Never confirm by replying to the email that asked for the change.
2. Add social engineering cover to your policies.Ask for a social engineering or funds transfer fraud endorsement. Without one, cyber and crime policies may pay nothing for a wire to a fraudster.
3. Keep E&O running, and buy a tail.E&O (professional liability) answers claims first made in the policy year, for work after its retroactive date. Buy a tail before you close or retire.

Professional liability (E&O) is not required by law for most consultants, but nearly every MSA demands it at a stated limit. Buying the limit is the easy part. Two situations show where cover breaks down.

The spoofed wire

For example, your bookkeeper receives an email that looks like it came from a subcontractor, asking for payment to a new account, and wires $38,000. Without a social engineering endorsement, your cyber and crime policies may pay nothing.

1. Call the bank within hours.Ask it to attempt a recall of the wire.
2. Report it.File a report with the FBI's IC3.
3. Close the gap.From now on, verify any change of bank details by phone before money moves, not by replying to the email.

Cyber cover handles breach response. Without a social engineering or funds transfer fraud endorsement, cyber and crime policies may pay nothing for the diverted wire.

The claim after the policy stopped

E&O is claims-made: it answers claims first made in the policy year, for work done after the retroactive date. Stop the policy when you close or retire and a claim about past advice has nothing to answer it. Keep it continuous, and arrange an extended reporting period, or tail, before you close or retire, so it is in place when the policy ends. Match the tail to how long clients can sue on your contracts: as of Oct 2026, written-contract limitation periods include four years in California and Texas, six in New York and five in Florida.

Read the policy against your MSAs

• Who decides whether a claim is settled: read the consent-to-settle (hammer) clause.
• Whether defense costs erode the limit, leaving less to pay the claim itself.
• That the limits match what each MSA requires.
• General liability for work at client sites, with certificates naming clients as additional insured.

If you sit on a client's leadership team

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