What Is Business Email Compromise? (And How Cyber Liability Insurance Can Protect You)

What Is Business Email Compromise? (And How Cyber Liability Insurance Can Protect You)

Business Email Compromise (BEC) is one of the fastest-growing and most financially devastating types of cybercrime affecting businesses today. In a BEC attack, cybercriminals gain unauthorized access to a company’s email accounts—typically through phishing or other social engineering tactics—and use that access to manipulate internal communication and financial transactions.

How Does a BEC Attack Work?

Once hackers get into a company’s email system, they can impersonate executives, employees, or trusted vendors. They use this access to redirect payments, trick employees into wiring funds to fraudulent accounts, or steal sensitive company data.

Real-world example:

A hacker gains access to your CFO’s email account. They send a message to your accounting department, requesting an urgent wire transfer to a new vendor bank account. The message looks legitimate and matches the CFO’s communication style. Believing it to be real, the funds are transferred—and lost.

Why Business Email Compromise Is So Dangerous

• Highly convincing: Messages appear to come from within your organization.
• Targets human behavior: It relies on trust, not just technical vulnerabilities.
• Financial impact: BEC can lead to six- or seven-figure losses.
• Reputational damage: It erodes customer and vendor trust.

How Cyber Liability Insurance Helps

Cyber liability insurance is one of the most effective tools to help businesses recover from the fallout of a Business Email Compromise.

Here’s what a robust policy may cover:

• Forensic investigation costs to identify how the breach occurred.
• Data recovery and restoration expenses.
• Notification and credit monitoring for affected parties.
• Legal defense and settlement costs if lawsuits arise.
• Reimbursement of financial losses, depending on your policy language.

Not All Cyber Liability Policies Are the Same

This is critical: not every cyber policy automatically covers Business Email Compromise or funds transfer fraud. Some only cover the cost of response and remediation—not the actual lost funds. Others may exclude social engineering scams unless added through an endorsement.

Tip: Make sure your cyber insurance policy specifically addresses Business Email Compromise and includes coverage for both direct and indirect losses. Review your policy carefully and speak with a knowledgeable insurance advisor if you’re unsure.

Conclusion

Business Email Compromise is a serious and growing cyber threat. Even the most cautious companies can fall victim to it. That’s why having the right cyber liability insurance in place is no longer optional—it’s essential.

📞 Need help reviewing your cyber insurance coverage? We’re here to help. Contact us today to make sure your business is protected from Business Email Compromise and other modern cyber threats.