Social engineering scams seeking to deceive companies into making wire transfers to fraudulent bank accounts continue to plague companies. According to the FBI, social engineering fraud costs businesses billions of dollars each year. On top of the lost funds, social engineering scams can lead to substantial investigation costs and even litigation.
Many businesses trust their crime or fidelity insurance policies to protect them from social engineering losses. Insurers, however, take the position that such policies do not cover all social engineering scams. Depending on the type of social engineering scam or how it happens to play out, insurers may deny coverage, depriving the policyholder of valuable insurance protection. Continue reading “Is There a Glitch in Insurance Coverage for Social Engineering Scams?”
The “WannaCry” and “NotPetya” computer viruses that infected computer systems around the world in 2017 sounded a wakeup call. They demonstrated the power of a cyber event to disrupt the core operations of numerous companies and other organizations. Now some fear that another unpleasant surprise related to the 2017 virus attacks may be on the horizon—this time from the insurance industry. A recent lawsuit alleges that an insurer denied coverage for losses arising out of the “NotPetya” virus based on an exclusion for “hostile and warlike actions.” A version of this war exclusion appears in virtually all insurance policies, including cyberinsurance policies, which are supposed to address cyber events like “WannaCry” and “Not Petya.”