Social Engineering Fraud and Business Email Compromise Overview

This document is a report that discusses Social Engineering Fraud (SEF) and Business Email Compromise (BEC), highlighting their increasing prevalence and impact on professional services. It outlines how these frauds have overtaken ransomware in terms of claims frequency, with significant financial losses reported. The report details the characteristics of SEF, emphasizing that it often does not involve direct hacking of the victim's systems but relies on psychological manipulation to persuade victims to transfer funds voluntarily. The document also addresses the complexities surrounding insurance coverage for such frauds, noting that traditional crime and cyber policies may not adequately cover losses due to exclusions related to voluntary transfers. Furthermore, it discusses the limitations of coverage options available for SEF, including sub-limits and underwriting requirements. The report concludes by stressing the importance of implementing proper controls to mitigate the risk of social engineering fraud and improve insurance placement experiences.