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Social Engineering Fraud on the Rise: How to Protect Yourself

A recent survey by a cybersecurity company indicated that 60 percent of organizations have been the victim of at least one targeted social engineering attack in the past year. Cybercrime is on the rise and cyber liability and social engineering coverage is more important than ever.

To understand how social engineering coverage may help protect you, consider one of our client’s recent experience with cyber hackers.

FRAUDULENT EVENT

A large manufacturing company received what appeared to be a routine email from their philanthropist president with a request for a wire transfer to the accounting department. Following an email exchange between the accounts payable department and the originating email sender, funds totaling more than $21,000 were transferred.

Three weeks later, a similar email was received, this time with a request for $98,000. Accounting advised the CFO, who called the president to confirm the request. The president denied sending the request. When the CFO asked if she had sent the prior request for $21,000, the president knew nothing about it.

RESOLUTION

Hylant was informed of the fraudulent activity, and it was reported to the FBI and local authorities. Fortunately, one week prior to the discovery, Hylant’s Rachel Dobbs, the client executive, had negotiated the company’s renewal program to include social engineering coverage, which covers such losses. Social engineering coverage is not typically included in crime policies and is only available through a handful of carriers. According to Forbes, social engineering attacks are now used in more than two-thirds of all hacking. Having a broker who specializes in risk management solutions is a necessity.

Hylant’s claims department, in cooperation with Rachel, reviewed the policy for coverage. Although the claim had occurred two weeks prior to the renewal policy, it was discovered five days afterward. Since the policy had been negotiated to include a “discovery date” trigger, Hylant was able to ensure the claim could be filed on the new policy.

The claim was reported to the carrier and the $21,000 was paid to the insured within a week, less the deductible.

SOLUTIONS

Hylant specializes in developing unique risk management solutions for large corporations in a variety of emerging risks, such as social engineering. Contact us to learn how we can help you.