Online-only school, home and office supplies retailer US Markerboard dipped its toes in selling internationally four years ago when it set up shop in Canada. The move generated good returns, says president and CEO Scott Newman, which led it to expand into the United Kingdom and Australia.

While those three countries have much in common with the United States, the fraud rate of slightly less than 1% on its international orders is double the e-retailer’s domestic fraud rate, says Newman.

That’s despite the retailer’s fraud prevention strategy. Every day two employees review the previous day’s orders and attempted orders. They look for instances of an individual trying to purchase with a single payment card but with different expiration dates or security codes, for disparities between shipping and billing addresses, as well as a number of other signs of potential fraud. If something seems askew, it pulls the order and does “due diligence,” including contacting the credit card company to see if other retailers have flagged the card for suspicious activity, Newman says.

That method catches a large enough portion of fraud that Newman doesn’t feel the need to enlist the help of a fraud prevention vendor. And in case a fraudulent order gets through, US Markerboard has a backup. The retailer has a cyber-liability insurance policy from Continental Casualty Co. The policy, which has a $500 deductible, covers the retailer’s costs in the case of fraud, security breaches and other criminal activities.

Because of the deductible, the policy might not work for some retailers, but for US Markerboard, which occasionally has orders that total several thousand dollars, it helps lessen its risk.  “You still have to do your due diligence to make sure an order is legitimate,” Newman says.

The insurance helped US Markerboard, No. 691 in the Second 500 Guide, recoup its losses when criminals made a “sizable” order and paid with a fraudulent Canadian prepaid cashier’s check. And, because US Markerboard’s manual system generally works, the insurance is an ideal safeguard for its business, Newman says. He declined to share the policy’s cost.

Read more about how retailers limit the risk of accepting international orders in the June issue of Internet Retailer. Click here to sign up for a free subscription.