In 2016 the Annual Fraud indicator estimated that private sector businesses lost an estimated £144 billion in Britain through criminal fraud – it is something that all entrepreneurs and company owners, large or small, should take seriously as ever more sophisticated techniques are employed. Cybercrime, used either to maliciously disrupt email, data, and web services or fraudulently to extract confidential information or money, has become particularly widespread during the last 12 months of lockdown although the government reports that as incidences have increased the average costs to individual businesses has decreased because greater awareness has led to better security overall.
Email phishing and baiting is something that most people are familiar with, from fake bank queries asking for personal information to emails from personal contacts requesting emergency financial help. In the past email filters and poorly written emails helped companies identify fraudsters but this is increasingly difficult particularly with the rise in social engineering techniques in which criminals extract confidential information or money by impersonating company directors and trusted suppliers. Criminals recreate emails and even websites which closely replicate legitimate contacts, copying logos, typefaces, shared information, and writing styles – they then leverage the social or business relationship to gain money or information from the company. As almost all communications even within a company are conducted online the criminals’ success relies on a natural security weakness – an innate desire to trust our business and personal contacts at face value.
While most standard office policies cover data breaches few offer adequate cover for fraudulent crime but it is now possible to buy a crime insurance policy to sit alongside your risk management controls with an option to include additional social engineering cover. In the past, this was something that only large companies considered as they were more likely to be targeted but from our own experience, there has been an increase in these sophisticated attempts to extract information and money across all business sectors.
In today’s world of fast digital communication, it makes sense for any businesses to consider a crime insurance policy with additional social engineering cover as it is relatively inexpensive policy with all-risks cover – as an indication £500,000 of indemnity cover can be bought for a premium of around £1000.
A crime insurance policy covers risks such as
• criminal taking or misappropriation of your money, securities, or property (with no distinction between employee and third-party losses)
• physical destruction or disappearance of money and securities while on premises, in employee custody, or in transit
• criminal taking by an employee of money and securities or property to the deprivation of a client
• criminal taking by a third-party of client money, securities, or property in your control and for which you are liable
• expenses cover to establish the existence of the loss and verify it’s amount. This also includes notification expenses in the event of a data breach
• computer violation by an employee
• telephone fraud
• public relations costs following a covered claim to limit or mitigate the impact on your business
• court attendance costs if a person has to attend court as a witness in respect of a client crime
In addition Social Engineering Cover, which specifically addresses impersonation of director, customer, employee or supplier to defraud the company, can be added on to this policy as an extension.
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