November 10, 2022

What is Business Email Compromise, and Does Cyber Insurance Cover It?

Email platforms are crucial for most organizations because they aid in streamlining communication among employees, clients, and third-party vendors. However, business email compromise attacks occur daily, evading detection by traditional security measures because they target humans instead of devices.

So, what is a ‘business email compromise’? Why does it occur? And lastly, how can you prevent it from harming your organization?

Don't worry – we've got you covered. This guide will help you answer these questions and devise an intensive plan to safeguard your business.

What Is Business Email Compromise?

At its core, BEC uses the oldest and most effective trick in a con man's sleeves – deception. The sophistication of this multifaceted fraud is unprecedented, and business professionals continue to fall victim to the scheme.

BEC is among the most sophisticated online crimes as it exploits people's reliance on email platforms to conduct professional transactions.

In a business email compromise attack, cybercriminals send an email that appears to come from a known source, making it seem like a legitimate request.

For example:

  • A "vendor" your company regularly transacts with sends an invoice using a different mailing address.
  • A "company’s CEO" asks their assistant to purchase multiple gift cards to give out as "employee rewards"
  • A homebuyer receives an email from his "broker" with instructions on how to send his initial payment

Different versions of these scenarios occur to real victims who receive fake messages from fraudsters. And in most cases, thousands of dollars are given to cybercriminals orchestrating such a crime.

3 Types of Business Email Compromise Attacks

When it comes to identifying what business email compromise is, it's essential to understand there are various types. Doing so will help you assess your company's exposure and develop strong strategies to mitigate an attack.

1. Spoofed Emails

Email spoofing is an act where the attacker modifies an email's header and envelope, making it appear authentic. The receiving mail server assumes that the email came from a corporate domain and that the recipient's email client displays the wrong sender data.

2. Phishing Emails

These emails appear to be from a trusted sender and usually contain links or files that will redirect the recipient to another tab. These attachments will ask them to provide confidential information like credit card and login credentials. Such information gives criminals easy access to company data to carry on with their cyber attacks.

3. Malicious Software

Malicious software, commonly known as malware, can infiltrate organization networks and access sensitive email threads regarding billing and invoices. Like phishing attacks, malware also gives cybercriminals undetected access to a victim's data, such as passwords and financial account information.

Effective Business Email Compromise Protection

Reinforce Employee Awareness

To avoid cybercriminals, your organization should implement mandatory cybersecurity awareness training among employees of all levels and departments.

Consider the following topics in your company-wide cyber resilience training program:

  • Proper password management, access privileges, and secure network connections
  • Social engineering and phishing attacks
  • Competent security for devices, especially now that the business industry is in the Bring Your Own Device (BYOD) era
  • Cybersecurity threat assessment, mitigation, and total resolution

Be Wary of Financial Requests

One of the best ways to protect your company from BEC is by carefully examining all requests involving payment and billing. Doing so will help you verify any payment and purchase requests, ensuring that they are legit and aren't scams.

So, as a rule of thumb, be extra suspicious when the sender is pressuring you to finalize the payment faster than you usually would. Be wary of words such as important, urgent, request, and payment, as these often imply that the sender is in a rush to get financial gains.

Double-Check All Email Addresses

Albeit a basic task, verifying the sender's email address is the best business email compromise protection. Prevent yourself from falling for spoofed email domains by carefully verifying the following:

  • Does the email address match the organization's personalized domain?
  • Was the email only sent to you and not Bcc'd?
  • Do the attached links redirect to the company's official website?
  • Is the email free from grammatical mistakes and spelling errors?

Prevent BEC With Cyber Insurance

Having a comprehensive cybersecurity system shouldn't be perceived as a luxury, it should be considered a necessity. Business email compromise is a persistent and prevalent threat, however with a multifaceted cybersecurity and insurance solution it’s much less of a worry!

1Fort helps insurance brokers get affordable cyber insurance seamlessly to cover their clients from the costs of BEC attacks, phishing scams, hacking attempts, data breaches, and much more. Learn more about how 1Fort can help you cyber insurance today.