Markets/Coverages: Liberty Specialty Markets, Baobab Offer E-Crime Cover for SMEs

Liberty Specialty Markets (LSM), a division of the US Liberty Mutual Group, and Baobab Insurance, a digital underwriter of technical risks, are offering a new joint e-crime insurance product for small and medium-sized enterprises (SME) in Germany and Austria.

LSM is providing capacity for the new product, while Baobab will take on operational tasks such as broker sales, product development and underwriting.

With this fidelity insurance, the partners are setting new standards in protection against digital fraud risks: With an insured sum of up to €5 million (US$5.4 million), a customized product for SMEs is available for the first time that is specifically tailored to fraud offences such as CEO fraud and deepfakes.

As a standalone product, the new fidelity insurance is available in March 2025 and will be integrated into the cyber application process in a timely manner.

The partners said the new e-crime insurance is characterized by a streamlined application process and at the same time offers one of the broadest coverages on the market. As a standalone product, the new fidelity insurance will be available from March 2025 and will also be integrated into the cyber application process in a timely manner.

Unlike the usual comprehensive catalogue of 20 questions on average, Baobab Insurance focuses on just five risk questions:

• Number of employees
• Annual turnover
• Activities in sanctioned countries
• Existence of a dual control principle for invoicing
• Existing fraud prevention measures.

The companies explained that generative AI is changing the quality and intensity of digital fraud threats such as CEO fraud and deep fakes. Compared to the previous year, for example, offenses involving hackers posing as supposed bosses increased by 17% in 2023. So far, however, the market has lagged behind because traditional insurers do not have an adequate product offering that meets the requirements of a dynamically changing threat landscape, they said, noting that they aim to close this protection gap with their new E-Crime product.

“As a specialist insurer, it was important for us to find a partner with in-depth expertise in the area of cyber risks. With Baobab, we have exactly this specialist at our side,” commented Michael Harth, general manager, Germany, Liberty Specialty Markets, in a statement. “Together, we are launching a product on the market that finally provides SMEs with efficient protection against e-crime — without an excessive application process.”

“Issues such as CEO fraud and deepfakes are a real threat to SMEs. Together with our existing cyber and IT liability insurance policies, we are now offering these companies a comprehensive range of services. In line with our strategy, we are thus positioning ourselves as a digital specialist insurer for technical risks,” according to Vincenz Klemm, co-founder and managing director of Baobab Insurance.

Source: Liberty Specialty Markets (LSM)