You’ve got a cybersecurity protocol. You’ve got a cyber insurance policy. And yet, one cleverly crafted email from a “vendor” leads to a six-figure wire transfer that vanishes into a scammer’s account.
Your business did everything right—except for one thing: your cyber policy doesn’t cover social engineering fraud.
If that sounds familiar, you’re not alone. At Elevate Legal Services, our Florida-based cyber insurance attorneys help companies fight denied claims tied to phishing, business email compromise (BEC), and other human-targeted scams. Here’s what you need to know.
What Is Social Engineering Fraud?
Social engineering fraud is any scam that manipulates people—rather than tech—to bypass security protocols.
Common examples include:
- Phishing emails that mimic vendors or executives
- Business email compromise (BEC), where a hacker poses as a CEO or CFO
- Vendor impersonation scams requesting payment changes
- Fake invoice fraud with a legitimate-looking billing
The common denominator? Your employee voluntarily sent money or sensitive data based on a lie.
Why Cyber Policies Often Exclude It
Most business owners assume cyber insurance covers all cybercrime. But unless your policy includes a specific rider for social engineering or impersonation fraud, your insurer may reject the claim.
Typical denial reasons include:
- “No unauthorized access occurred”
- “Voluntary payment does not qualify as theft”
- “Employee action voids first-party loss clause”
- “Loss due to deception, not breach”
This is frustrating, especially when social engineering is now the #1 cause of cyber-related financial losses.
Coverage Gaps You Should Be Aware Of
Even comprehensive cyber policies often exclude or severely limit:
- Losses from voluntary wire transfers
- Fraud from spoofed email accounts
- Funds sent without actual system compromise
- Coverage for third-party vendors duped into fraud
In other words, unless the hacker breaks in, steals data, or shuts down systems, your claim may be denied—even if your company suffers real, traceable losses.
What to Do If Your Claim Was Denied
If your cyber claim was denied on social engineering grounds, don’t accept it at face value. Our legal team can:
- Review your policy and the insurer’s justification
- Challenge unfair exclusions or vague policy language
- Negotiate or litigate to recover funds
- Advise on regulatory and compliance reporting (FTC, SEC, etc.)
- Help amend your policy moving forward
Explore our full cyber insurance claim services to learn how we help businesses recover from denied or delayed claims.
Real-World Example: $210K Gone in a Day
A Florida construction company received an email from a longtime subcontractor requesting an update to their wire transfer details. The email looked legitimate. It included the subcontractor’s signature, logo, and even a project code.
The company wired $210,000.
A week later, the real subcontractor called to ask where their payment was. The insurer denied the cyber claim, citing a lack of system breach and “voluntary transfer.”
We stepped in, arguing:
- The policy language was ambiguous
- The client took reasonable measures
- The insurer had marketed the policy as “comprehensive cyber coverage.”
The case was ultimately settled through mediation, without a court trial. Don’t wait for a worst-case scenario. Get legal help before the damage multiplies.
How to Protect Yourself in the Future
Along with legal review of your current policy, we recommend:
- Asking your broker about social engineering riders
- Setting up dual-approval procedures for large payments
- Educating staff on BEC red flags and protocols
- Segmenting email servers and financial systems
We also work with in-house compliance and IT teams to establish legal and technical safeguards for future fraud prevention.
Final Thoughts: You’re Not Paranoid—Your Policy May Be Incomplete
Social engineering fraud is clever, devastating, and increasingly common. But insurers are still playing catch-up—and using outdated policy language to dodge valid claims.
If you’re unsure what your cyber policy covers, it’s time to get answers. And if your claim has already been denied, it’s not too late to fight back. Hire
Was Your Cyber Claim Denied After a Phishing Scam?
📞 Contact Elevate Legal Services today. Our cyber insurance attorneys can review your policy, challenge exclusions, and help your business recover faster and stronger.
