Does Cyber Insurance Cover Social Engineering?

Social engineering attacks are on the rise—and they can cost your business big. From email scams posing as your CEO to fraudulent vendor payment requests, these schemes are designed to trick your employees into giving up sensitive information or sending money. But will your cyber insurance policy actually cover you if that happens?

Let’s break it down.

What Is Social Engineering?

Social engineering is a form of cyberattack that manipulates people—rather than systems—into handing over confidential information or making unauthorized financial transactions.

These attacks often look like:

An email from a “CEO” requesting an urgent wire transfer
A call from someone posing as your IT team asking for login credentials
A fake invoice from what appears to be a trusted vendor

In short, it’s a high-tech con game that can result in serious financial and reputational damage for your business.

Does Cyber Insurance Cover Social Engineering?

The answer: It depends on your policy.

Many comprehensive cyber liability insurance policies do include coverage for social engineering attacks, but it’s not guaranteed. If it is covered, your policy might reimburse you for:

Stolen funds due to fraudulent instructions
Costs to restore compromised systems or data
Legal expenses if sensitive client or employee information is breached

However, some cyber policies exclude social engineering or only provide limited coverage with low sublimits. That’s why reviewing your policy and working with an experienced insurance agent is so important.

Why This Coverage Matters

Social engineering claims are among the most common and costly cyber claims, especially for small and mid-sized businesses. Without proper coverage, you could be left paying tens of thousands—or more—out of pocket.

If your current cyber policy doesn’t include coverage for social engineering or “fraudulent instruction” losses, it may be time for an upgrade.

How to Protect Your Business Beyond Insurance

Even with a solid cyber insurance policy in place, employee training is one of the best defenses against social engineering. Consider:

Running simulated phishing tests
Hosting regular cybersecurity awareness training
Creating clear internal procedures for handling financial or login credential requests

Prevention and education go hand-in-hand with the right insurance protection.

Final Thoughts: Don’t Assume You’re Covered

Many business owners assume their cyber insurance policy covers all types of cybercrime—but that’s not always the case. Make sure your policy specifically includes social engineering coverage. It’s a small detail that can make a huge difference when an attack happens.

Need help reviewing your cyber insurance coverage?

We’re here to help. Contact us today to make sure your business is properly protected.

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