What is Fraud Loss Insurance?
Digital identity fraud is a growing problem for every online business today. But traditional insurance — general liability, cyber risk, and business policies — excludes losses caused by your business's exposure to fraudsters walking through the front door using stolen, fake, and real people's identities, pretending to be legitimate customers.
Fraud Loss Insurance is a financial-services product that indemnifies your business against monetary losses from identity fraud committed during and after digital onboarding. Instead of absorbing those losses on your own balance sheet, you transfer the liability to an insurer for a fixed premium — with covered losses reimbursed after a claim.
Not a detection tool. An insurance line that pays when detection fails.
The most common reaction is “isn’t this just another Socure?” It isn’t. Detection and insurance solve different halves of the problem.
Identity verification
Confirms an applicant is who they claim to be. Returns a pass/fail. The loss when a “pass” is fraud stays with you.
Fraud detection & scoring
Estimates the probability an application is fraudulent. Lowers frequency. Never covers the cost of the fraud it misses.
Fraud Loss Insurance
Pays you back when a verified, approved identity turns out to be fraud. Moves the residual financial liability off your P&L.
How the coverage is built
Instnt pairs an AI fraud-loss model with insurer-backed capacity. The model prices the residual risk your detection stack can’t remove; rated reinsurers stand behind the policy.
- Actuarially-validated AI underwriting prices fraud-loss risk in real time across identity, device, behavioral, and transactional signals.
- Balance-sheet capacity from Munich Re and Swiss Re, each rated A+ (Superior) by AM Best.
- Claims administration handled through established insurance processes, with reimbursement in 30 days.
How a claim works
A covered fraud loss occurs
A verified, approved identity turns out to be fraudulent and causes a monetary loss.
You file in minutes
Submit the claim with the evidence Instnt already captured at onboarding.
Reimbursed in 30 days
Covered losses are paid within 30 days, denial-free — contingent on approval terms.
Fraud Loss Insurance, answered
Is this real insurance?
Yes. It is a new P&C surplus insurance line arranged by Instnt Insurance Agency and reinsured by Munich Re and Swiss Re, each rated A+ (Superior) by AM Best. You pay a fixed premium and file claims for covered losses — it is not a warranty, a guarantee, or a detection tool with a policy attached.
Who underwrites and backs the coverage?
Coverage is backed by Munich Re and Swiss Re, each rated A+ (Superior) by AM Best. Instnt’s AI model prices the fraud-loss risk; the balance-sheet capacity behind the policy comes from those rated global reinsurers.
What kinds of fraud are covered?
Identity-fraud losses incurred during and after digital onboarding — including synthetic identity fraud, third-party/stolen-identity fraud, account takeover, and first-party (never-pay) fraud — subject to the policy terms and underwriting.
Does it replace my KYC or fraud-detection stack?
No. Instnt sits alongside your existing verification and detection tools as a drop-in agent. Those reduce how often fraud happens; Instnt insures the residual loss when fraud gets through anyway.
How fast are claims paid?
Covered losses are reimbursed within 30 days of a filed claim, denial-free — contingent on underwriting and approval terms.
See what your fraud loss looks like insured
Get a tailored exposure analysis and a sample premium for your book.