Social engineering fraud insurance protects Australian businesses from financial loss caused by deception-based cyberattacks targeting employees and systems.

Social engineering fraud insurance is a specialised form of cyber cover that protects businesses from financial losses caused by deception-based attacks. These attacks manipulate employees into transferring funds, sharing credentials, or granting access to sensitive systems—often without realising they’ve been compromised.

Unlike traditional cybercrime, social engineering relies on psychological manipulation rather than technical breaches. Common tactics include:

• Phishing and spear phishing: Fake emails or texts impersonating trusted contacts
• Pretexting: Posing as an authority figure to extract information
• Impersonation: Pretending to be a vendor, executive, or colleague
• Scareware and baiting: Using fear or curiosity to prompt action

These attacks are increasingly sophisticated and widespread. In Australia, a cybercrime report is filed approximately every eight minutes, and social engineering is a major contributor. Small and medium-sized enterprises are particularly vulnerable due to limited cybersecurity infrastructure and staff training. Social engineering fraud insurance typically covers:

• Direct financial loss from fraudulent transfers
• Incident response and breach investigation
• Legal defence costs
• Data recovery and system restoration
• Crisis and PR management
• Cyber extortion and impersonation-related losses

Coverage is often added as an extension to cyber or crime insurance policies. However, many standard policies exclude social engineering unless specifically endorsed. Businesses should work with brokers to ensure their policy includes this protection and reflects their risk profile.

In short, social engineering fraud insurance is essential for modern businesses. It helps mitigate financial and reputational damage from increasingly common and costly deception-based cyberattacks.