You’ve likely heard the term. You’ve maybe even seen news reports warning about it. Even more worrisome…it’s possible you’ve been a target already.
What am I talking about? Social engineering fraud. And yes, if you’re in the agricultural field, you’re greatly impacted. More on that in a moment, but first, if you aren’t quite sure what social engineering fraud is, I’ve defined it for you. It’s a scam used to intentionally mislead and manipulate someone into sharing confidential information or funds (usually via wire transfer). These scams generally come in a person’s email, but they could also start with a call or letter. And when this type of fraud happens to a company, typically an employee gets an email that looks legit and like it’s from a company vendor, client, or co-worker.
Now, you might be saying, “What does this have to do with agriculture?” My answer — a whole lot, actually. In this line of business, I’ve seen many agriculture accounts that either don’t have coverage to help with this liability or have very low limits. What I hear is that clients assume since they’re in smaller communities, social engineering fraud can’t and won’t happen to them. Sadly, that’s a bad assumption.
In 2016, agriculture was the largest industry sector exposed to phishing attacks (yes, I said largest) and had the 2nd highest rate of email-borne threats according to the Symantec™ 2017 Internet Security Threat Report. Yikes!
Aside from agriculture, and more generally speaking, there are a lot of scary statistics out there related to social engineering fraud. As published by a Federal Bureau of Investigation (FBI) Public Service Announcement (PSA) dated May 4, 2017:
- Between January 2015 and December 2016, there was a 2,370 percent increase in identified exposed losses.
- Social engineering fraud has been reported in all 50 states and 131 countries.
- Fraudulent wire transfers have been sent to 103 countries. China and Hong Kong remain the primary destinations of fraudulent funds, but financial institutions in the United Kingdom have also been identified as prominent destinations.
Additionally, the same report contained these stats:
- Total number of domestic and international incidents: 40,203
- Domestic and international exposed dollar loss: $5,302,890,448
- Total U.S. victims: 22,292
- Total U.S. exposed dollar loss: $1,594,503,669
At this rate, it appears no one and no industry is secure from social engineering attempts and attacks. Even well-managed businesses are at risk — large and small. Fraudsters have become very sophisticated in their schemes. Many times, a company may not even realize a loss has occurred until they are notified by the true recipient that payment was never received.
So what can you do to make sure you’re protected? The FBI PSA I referred to earlier has a lot of great self-protection strategies. I’d encourage you to take a look and see what fits well with your business.
Aside from that…take a look at your insurance strategy! I’m not going to lie, though, when it comes to insurance, it can be a bit tricky. Unless endorsed, Crime policies don’t cover social engineering losses. Crime policies contain a “voluntary parting” exclusion that bars coverage for losses arising out of incidents where the insured voluntarily gives up possession of the money/property, etc. On top of that, coverage is usually subject to a sublimit.
My best advice is to reach out to us. Our team can evaluate your current coverage and offer options that fit your business. Not only that, but our Holmes Murphy claim staff has experience in working with these types of crime claims…so, they’ve “been there, done that.” The key is to remember that all coverage is NOT created equal. So, let us know your questions and we’ll use the knowledge we have to get you the coverage you need.
