I don’t know, right? What is it?
Social Engineering Fraud occurs when an employee is intentionally misled into sending money or diverting a payment when deceptively induced to do so. It is a fraud scheme by someone posing as a trusted vendor, employee, new client or supplier.
According to the Symantec 2014 Security Threat Report, targeted attacks on business have risen 91% over the last year! The Front Line Report by Hillard Heintze reports that there are over 100,000 social engineering attacks launched each day.
Loss prevention is a vital part of risk avoidance and employee training, partner background screening and financial checks and balances and other similar measures can serve to be effective. As we know, even the best laid plans can sometimes be thwarted. If that is the case and your business is a victim of social engineering fraud then how can you be protected?
Crime insurers are responding to the risk by providing a Social Engineering Fraud Endorsement. It is important to review your Crime Insurance to see if you have this endorsement. If you were not aware of the exposure until now then there is a fair chance that you do not have the endorsement. Not all insurers have provided the endorsement so it is important to discuss this with your insurance agent. Chubb and Travelers are two insurers that can add the endorsement to their Crime coverage.
The endorsement is offered in this manner by one of the insurers:
- 25% of Insuring Agreement for Employee Theft with a maximum limit up to $250,000
- Retention Minimum: 10% of Social Engineering Limit
- Premium charge is based on limit offered
- Applicant must purchase Computer Fraud and Funds Transfer Fraud
Social Engineering Fraud losses include:
- Vendor or supplier impersonation
- Executive impersonation
- Client impersonation
If you would like to learn more about the subject and the endorsement, please contact Hugh Carroll at 301.838.8832 or email at firstname.lastname@example.org
Information about the Author: Hugh is a native of Washington, DC and was raised in Silver Spring, MD. He graduated from University of Maryland at College Park and entered into the insurance business in 1977 as a claims adjuster. He then entered into the brokerage end of the business when he joined a large international insurance broker. Here Hugh focused on the commercial insurance needs of contractors, technology companies, and non-profits among other industry sections. Hugh joined the team at IA, a Marsh & McLennan Agency LLC Company in 2009 and currently serves on the board of both the Home Builder’s Care Foundation, and the Catholic Business Network of Montgomery County.