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    What Is Social Engineering Insurance?

    What Is Social Engineering Insurance?

    According to a report by the FBI, cyberattacks have spiked by 400% during the global pandemic. Social engineering fraud has become more rampant than ever, with hackers tricking employees into disclosing private information, resulting in widespread data breaches.

    Social engineering fraud coverage can help protect employees from falling victim to computer fraud. It is available under cyber liability insurance policies and typically limited to $100,000 in terms of coverage.

    What Is Social Engineering Insurance?

    In order to ensure that your insurance plan has social engineering fraud coverage, it's best to look very closely at the wording of your cyber insurance policy. Sometimes, insurance coverage does not include the voluntary parting of company property or funds to a third party. This means that if an employee is deceived by a malicious email or phone call, they might not be covered by insurers in terms of loss.

    In contrast, comprehensive cyber insurance policies include detailed coverage that protects companies from social engineering attacks. Social engineering coverage can usually:

    • Provides coverage against fraud related to client impersonation, executive impersonation, or vendor or supplier impersonation
    • Be added to a crime insurance policy
    • Offers added financial protection on top of company security measures

    What Are Examples of Social Engineering?

    Social engineering can either be human-based and computer-based. Human-based social engineering methods involves contact between two people and can include:

    • Impersonation of a workplace manager to obtain login credentials
    • Posing as a third-party or contractor
    • Dumpster diving to obtain documents that contain private data from companies

    On the other hand, computer-based social engineering fraud losses are computer-based and can use software tactics including:

    • Phishing attacks - Scams using text message or email campaigns linked to computer fraud
    • Baiting - Using a false promise to trick users
    • Scareware - Scaring victims into compliance
    • Pretexting - Establishing trust with a user through carefully crafted lies

    Why Is Social Engineering Dangerous?

    No matter how strong the security system of a company is, fraud detection systems can only go so far. Even with strict controls, an unsuspecting employee can be duped by a criminal that poses as a new client or a fellow worker during a phishing attack. Social engineering is particularly risky, especially because:

    • A business can lose large sums of funds during wire transfers without realizing it until its too late
    • Social engineering attacks are becoming more common than ever
    • Given the large number of individuals that work in companies, anyone can be made a victim in the supply chain process

    Although insurers can take on some of the financial burdens that a data leak can cause, limited coverage can still cause a major money headache for companies that have limited means to recover from a large-scale social engineering attack.

    How Is Social Engineering Prevented?

    The best way for an institution to protect its computer systems from infiltration against phishing scams and more is to educate its colleagues. Emphasizing basic cybersecurity defense mechanisms during work from home periods is crucial. In addition, cyber liability insurance can provide additional coverage for vulnerable businesses.

    What Is the Best Defense Against Social Engineering Attacks?

    Along with looking into cybercrime insurance coverage, a business can keep its funds safe through certain risk mitigation responses, including:

    • Using anti-spam and virus software
    • Filtering content and URLs
    • Securing web gateways
    • Establishing a secure verification system during financial transactions
    • Providing strict computer system controls and building corporate awareness for employees
    • Avoiding clicking on any email offers and suspicious links that sound too good to be true

    How Does Social Engineering Relate to Social Media?

    With the rise of oversharing on social media, businesses can also suffer significant financial loss from social networks. Revealing private company data online can lead to a loss of funds through various methods. For instance, something as simple as a team selfie could reveal confidential data.

    Cybercriminals are also capable of creating false social media profiles that mimic public information belonging to existing employees. This can be a massive risk for employees who may be misled into revealing valuable data.

    To prevent financial loss from occurring, every employee should:

    • Think twice before posting anything that can pose a possible risk to their business
    • Avoid sharing their location and other sensitive information
    • Enable multifactor authentication during logins
    • Change settings on all their accounts to maximize privacy and personally verify any friend requests before accepting

    Frequently Asked Questions

    Is social engineering a crime?

    In recent years, savvy cyber thieves have found new ways to steal money by hijacking people's phone numbers and asking for sensitive information such as bank details or even passwords. Vishing, also known as "voice phishing", is the criminal practice of using social engineering over a telephone system to gain access to private personal and financial information from the public for monetary reward.

    What is invoice manipulation coverage?

    Invoice manipulation happens when the customers or vendors are tricked into using legitimate email and data of the insured business to get them to alter a payment or delivery of products, services, or goods by an external actor. Such actors have often taken control over other organizations' communications through this fraud scheme.

    What is a socially engineered email?

    Socially engineered messages are a form of cyberattack where a hacker sends out malicious emails with the intent to trick users into performing specific actions. They can be sent via email, text message, or instant messaging services and will typically include attachments that could contain viruses in order to infect your computer's hard drive.

    How can pharming be prevented?

    Pharming attacks are a real threat, but there's still time to protect yourself. Phishing emails can trick you into thinking they're from someone you know or trust and lead to phasing malware onto your computer that could steal information like credit card numbers or passwords for online accounts.

    If you want to avoid pharming attacks, one of the most important things you can do is watch out for malicious emails. You should also check any red flags on websites that might seem suspicious and make sure your computers have antivirus software and firewalls installed before going online.

    What is the difference between malware and social engineering?

    Ransomware locks up all the information on an infected network unless one pays for their release through untraceable payments (such as with Bitcoin).

    Alternatively, social engineering relies heavily upon deception to trick victims into performing certain actions involving linking computers together. This is often done through email attachments containing malware programs that invade personal devices without permission, thereby granting hackers full control over another person's computer system.

    Social engineering is one of the most popular methods of stealing data due to its age-old effectiveness. By emotionally manipulating unsuspecting employees and users, cybercriminals can steal the hard-earned money of unfortunate businesses. As technology advances and attacks grow more sophisticated, cyber coverage plans will have to adjust to meet increasing demand.

    Along with comprehensive social engineering coverage, the best way for you to protect your organization is to educate workers so that they recognize when a link or money transfer is suspicious in any way. For more information on protecting against cyber liability, feel free to brush up on the basics at Assured Standard.

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