The Town of Norwich’s insurance policy will cover the direct loss suffered from the business email compromise (BEC) scam that saw nearly $250,000 stolen from the Town’s General Fund. Town Manager Herb Durfee made the public announcement at the Selectboard meeting on Wednesday, as seen on CATV, although the Selectboard knew a number of days earlier.
The Town’s insurance is through the Vermont League of Cities and Towns, which oversees the Property and Casualty Intermunicipal Fund or PACIF. Previously, PACIF had capped coverage for the loss at $25,000.
The email to the Town Manager reads in part:
Based on our investigation and the [Burgess Report] we will provide coverage for this loss under the faithful performance coverage. I will prepare payment for the amount of $168,955.00. This figure reflects the S1,000.00 deductible.
Norwich had previously recovered nearly $80,000 from a recipient bank, making the net loss to be $169, 955.
It was not clear from the discussion whether other costs. such as temporary staff, will be covered.
The coverage decision is good news for taxpayers. Public officials still have work to do. In the Selectboard packet is a PACIF Risk Management Report outlining six recommended administrative changes with a target completion date of December 23.