Social Engineering, by and large not an entirely new scheme, has taken on a technological edge. As such, it had been lumped into the category of “cyber fraud” because of this new delivery method. Previously this created a gap in coverage and insurance coverage was slim to non-existent for socially engineered crime (explained below). All of this, however, has changed. Read below to find out what exactly qualifies for social engineering and what coverages are available for business owners.
What is Social Engineering?
Social Engineering is cajoling people into releasing confidential information by building or utilizing a false sense of trust. Criminal social engineers vary in the type of data they are seeking. They may simply try to obtain passwords and personal information such as social security numbers or they may do more complex schemes like getting an individual to unknowingly install malware onto their workstation or pay an invoice to a false third party. Regardless what the endgame is, social engineering involves manipulating unknowing individuals to assist the social engineer in obtaining or accessing information the social engineer has no rights to.
Who is a Victim of Social Engineering?
A criminal social engineer can indiscriminately attack either individuals or businesses of all sizes. According to the Internet Security Threat Report 2015 by Symantec, small businesses were victim to 43%, mid-sized businesses 22% and large businesses 35% of spear-phishing attacks (a social engineering technique). You can download the report by clicking the name of the report above.
What Type of Coverage Protects Against Social Engineering?
Companies, realizing the gap in coverage for business owners, are now offering Social Engineering coverage. Until recently, Social Engineering coverage was slim, as most crime and cyber policies only covered losses when a third party is the source of the loss. Since social engineering crimes utilize inside help from unknowing employees, these losses were not covered. The new Social Engineering coverage usually comes in the form of an endorsement on a crime policy. Several major insurers, such as Traveler, Chubb and Hanover are offering such endorsements.
When applying for this endorsement, business owners will answer questionnaires geared towards learning the level of safety precautions are already in place to deter social engineering fraud. A business owner may need to increase security measures before an endorsement is issued. Contact your Beckerman & Co representative today to learn more about Social Engineering coverage and how to apply.