Social Engineering Fraud: Evaluating for Gaps and Overlaps
Cyber crime is a booming business for criminals. Businesses of all sizes are being targeted for scams that range from tech support scams to phishing attacks and telecommunications fraud. With the ability to outsource services via ‘Crime as a Service’ (CaaS), it lowers the bar for entry into cyber crime.
This offering provides the tools for someone lacking technical knowledge to buy services to carry out cyber crime. CaaS allows the most unsophisticated criminals to utilize harmful technology.
Another challenge for law enforcement is that cyber crime is difficult to track. The FBI estimates that only 15% of fraud is reported by their victims 1. According to the FBI’s Internet Crime Complaint Center report, in 2016 they received 298,728 complaints with reported losses in excess of $1.3 billion. If we factor in the estimated unreported cyber crimes, that number is a little under $9 billion.
Historically, crime policies have been fairly static. Until recently, there has not been a need to evaluate the coverages and endorse the crime policies. The new and emerging trends have changed the landscape for this coverage, such as:
- Social engineering fraud
- Business email compromise/ e-mail account compromise
- CEO Fraud
- Telecommunications fraud
- Computer fraud
The evolving crime and cyber environment has necessitated a need to coordinate coverage between the cyber policy and the crime policy. Traditionally crime is theft of money and cyber is theft of data. As the lines of coverage begin to blur, cyber liability carriers are adding grants of coverage for cyber crime and crime markets are adding cyber coverage.
It is important to coordinate the “Other Insurance” provision in both policies if there is duplicate coverage. This should assist in the event of a claim and determine which is primary and which is excess. Every organization should work with their insurance broker to evaluate potential gaps in coverage and overlaps as well.
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Associate Client Executive | 513.716.6002
Lacy is an Associate Account Executive and member of the Executive Risk Practice at Oswald Companies in Cincinnati. Her focus is on management liability and professional liability lines of coverage. In addition, she serves as Cyber Liability specialist and resource at Oswald Companies. She negotiates policy enhancements across all lines of coverage for Executive Risk including D&O, EPL, Fiduciary Liability, Professional Liability, Crime, and Kidnap & Ransom and Cyber Liability. She works closely with carriers to draft policy enhancements and frequently speaks and blogs about Cyber Liability topics. She earned her Bachelor of Arts degree in History with a minor in Art History from Indiana University.
Note: This communication is for informational purposes only. Although every reasonable effort is made to present current and accurate information, Oswald makes no guarantees of any kind and cannot be held liable for any outdated or incorrect information.