Are You Protecting Your Business from Social Engineering Schemes?

Photo by Jefferson Santos on Unsplash

Social engineering fraud is a confidence scheme that intentionally misleads an employee into sending money or payment based on false information. These attacks are usually communicated through electronic correspondence such as email or fax and target specific victims.

You may be thinking that this can’t happen to your company, but you would be wise to keep an eye out. This fraud scheme is very successful and targets both large and small companies every day. The susceptibility lies with an employee who may be very busy and appears to receive a message from a legitimate vendor, client, or even employer requesting information or a release of funds. Usually the perpetrator has already researched and targeted specific recipients. Armed with enough information to better disguise themselves, the criminal is often able to trick the employee by applying time constraints to an overly occupied individual. It is common that fraudulent messages will contain a duplicated email signature and account name from the person that they are intending to mimic. Some messages even slightly change phone numbers so that if the recipient calls back to verify the request, they will be redirected and reaffirmed.

One of the most alarming aspects of social engineering fraud is that it targets businesses of all sizes. Small businesses, who are usually the least equipped to defend themselves from fraudulent attacks, are the most commonly targeted. Being aware of this type of scheme and providing guidance to your employees and support staff is an important aspect of protecting your company. However, being apprised of the risks still doesn’t protect your company when disaster strikes. The best way to ensure that your assets are protected is to provide a layer of insurance coverage for this type of exposure.

So what type of insurance policy would cover instances of social engineering fraud? Although most instances of this fraud transpire over email communication, it is a company’s Crime Insurance policy that would provide coverage for Social Engineering fraud rather than a typical Cyber Liability policy. It is extremely important to understand your policy and the coverage provided:

Cyber Liability Policies cover losses that result from unauthorized data breaches or system failures. This typically doesn’t apply to social engineering fraud because these schemes depend on your cyber systems working correctly to communicate and facilitate the transfer of information or funds. Crime Insurance Policies cover losses that result from theft, fraud or deception. A company would file a claim under its crime policy in the case of a social engineering scheme based on fraud being the underlying cause of loss.

Standard crime and fidelity policies usually provide coverage for computer fraud and funds transfer fraud. However, there are exceptions where an insurer may exclude these coverages on your policy. You can avoid missing out on this integral coverage by consulting with your insurance agent and discussing fraud exposure on your Crime policy.

Due to the increasing popularity of these schemes and the demand for protection from small business owners, insurance carriers have started offering Social Engineering Fraud endorsements to their crime and fidelity policies. It’s important to ask your agent about Social Engineering coverage and how you can be properly protected. For more information regarding your coverage options and ways you can protect your business, contact a qualified agent at Moore Resources Insurance Agency.

Moore Resources is an Independent Insurance Agency located in St. Petersburg, FL and offering Homeowners Insurance, Auto Insurance, Personal Insurance and Business Insurance. Our reach extends beyond the Tampa Bay area to the entire state of Florida. Moore Resources has regionally been dedicated to serving the local residents of Pinellas, Hillsborough, Polk, Pasco, Manatee and Sarasota counties; including St. Pete, Tampa, Clearwater, Bradenton, Brandon, Dunedin, Gulfport, Lakeland, Largo, Lutz, Palm Harbor, Pinellas Park, Riverview, Ruskin, Seffner, Seminole, Temple Terrace, Tierra Verde, Town n Country,  and the Gulf Coast Beaches.

The purpose of this blog is to present general information only. It does not interpret specific policies or coverage. In order to obtain detailed information regarding your insurance, contact a licensed insurance agent.