Social Engineering & Wire Fraud: Is It Covered by Cyber Insurance?
What Is Social Engineering Fraud?
Social engineering fraud occurs when criminals impersonate a trusted party — a CEO, vendor, or bank — to trick an employee into wiring funds or revealing credentials. The most common form is Business Email Compromise (BEC), where attackers spoof executive email addresses to authorize fraudulent wire transfers.
The Coverage Gap Most Businesses Don't Know About
Standard cyber policies cover system hacks and data breaches — but many define social engineering fraud as a "voluntary" transfer, which is excluded. Check every policy carefully for:
- Social Engineering sublimit (often capped at $100K–$250K on a $1M cyber policy)
- Funds Transfer Fraud endorsement
- Computer Fraud under crime policy
Frequently Asked Questions
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