Despite dealing in physical goods, precious metals dealers and numismatists face serious digital threats. Last June, JM Bullion, Inc., an online precious metals dealer, paid $14.8 million to settle a class action lawsuit brought after hackers stole customers’ personal and payment information.
Cybersecurity hacks like these are becoming more frequent and more costly. While traditional precious metals insurance focuses on physical theft and fire damage, the digital transformation of bullion trading has created new vulnerabilities that threaten to bankrupt businesses that are unprepared.
For bullion and numismatic dealers, strong cybersecurity practices are essential. But no matter how advanced your defenses are, risks remain. That’s where specialized precious metals insurance plays a critical role: by bridging the gap between digital protections and financial recovery when criminals succeed.
What unique risks do numismatists and coin dealers face?
Unlike general retailers, coin and bullion businesses face combined digital and physical vulnerabilities, including transaction fraud, compromised shipments, forgery, and more.
1. High-Value Transaction Fraud
Precious metals dealers routinely handle wire transfers worth tens or even hundreds of thousands of dollars. This makes them prime targets for business email compromise (BEC) and payment diversion schemes. A single intercepted message could redirect six figures to a criminal’s account.
2. Compromised Shipments
Hackers and fraudsters can hack APIs and manipulate shipping addresses or impersonate clients to reroute valuable bullion deliveries. Once diverted, recovery is almost impossible.
3. Forged Provenance and Certification Data
Digital tampering of grading certificates, serial numbers, or provenance records can undermine trust and facilitate counterfeit sales.
4. Client List Exposure
Unlike typical customer data, a compromised client list here doesn’t just mean email spam—it can expose where high-net-worth collectors store physical assets, enabling burglary or robbery.
5. Fake Websites and Auction Listings
Cybercriminals regularly set up fraudulent dealer sites or auction pages, siphoning money and eroding industry trust.
These threats are far more severe than ordinary small-business risks because of the concentrated value per transaction and the collector-driven ecosystem of trust.
Are Cybersecurity Measures Enough to Protect Your Business?
Even the best digital defenses like multi-factor authentication, encrypted communications, and staff training can’t block every phishing attack or insider threat. Hackers exploit human error, and attackers often strike through third-party services like shipping or payment processors. While cybersecurity solutions are becoming more and more sophisticated, so are the cybercriminals. For every security step forward that a company takes, hackers are close behind. That’s why insurance designed for precious metals dealers and numismatists is essential.
How Does Precious Metals Insurance Fill the Gaps?
Specialized precious metals insurance coverage from agencies or brokers protects dealers where technology falls short or becomes vulnerable.
1. Fraud and Funds Transfer Protection
Coverage for payment diversion, wire fraud, and cyber-enabled theft. Programs from brokers include computer fraud and invalid payments coverage tailored for bullion and numismatic dealers.
2. Transit and Shipping Coverage
Shipments remain vulnerable to cyber manipulation (e.g., address changes). Insurance designed for high-value transit ensures you’re covered even if fraud redirects delivery.
3. Forgery and Internal Crime Protection
Policies can extend to employee dishonesty, forgery, and internal theft, including digital crimes.
4. Business Interruption and Cyber Liability Backstop
If ransomware disrupts your operations, insurers can cover lost income and recovery costs. Specialist brokers can offer policies that get you back up and running after a malware or ransomware attack.
5. Insurance for High-Value Assets
Some companies offer additional coverage for high-value, movable property such as bullion, coins, and fine art. These policies cover vaults, trade shows, exhibitions, and shipping insurance.
Numismatist and Coin Dealer Best Practices: Pair Insurance with Cybersecurity
The strongest protection comes from combining cyber protection with tailored insurance.
- Cybersecurity First: Multi-factor authentication, phishing awareness, secure communications, and encrypted client records.
- Insurance as a Safety Net: Coverage for fraud, theft, transit, and cyber-linked disruptions.
- Regular Reviews: Update policies as inventory, transaction volume, and digital risk exposure grow.
Final Thoughts
Precious metals and rare coin dealers face unique cyber-physical threats: high-value transactions, targeted client lists, forged certifications, and manipulated shipments. Cybersecurity helps prevent attacks, but when criminals succeed, specialized insurance is the financial shield that keeps your business whole.
If you’re a dealer, now is the time to review your coverage. Ensure your policy addresses both the digital and physical sides of your risk—and work with a broker experienced in the precious metals sector to secure your future.
