Deepfake Fraud Insurance: How Insurance Can Protect You from AI Fraud
Artificial Intelligence is changing our lives, work, and communications. However, with every positive advance, there seems to be an equally nasty advance too – deepfake fraud. Criminals, using AI, are cloning voices, creating false videos, and persuading people to transfer money or divulge sensitive information.
For both organisations and individuals, the question is straightforward – will insurance cover the losses if you have been scammed using AI?Does Deepfake fraud insurance exist?
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What are Deepfakes
Deepfakes include AI-generated images, video and audio recordings that appear and sound legitimate, but are actually entirely fake. Scammers create deepfakes in order to:
1. Impersonate a CEO, owner, manager, etc. – (e.g. ordering payments).
2. Defame someone or destroy their reputation – (e.g. creating fake videos or audio).
3. Steal personal information – (e.g. persuading someone to divulge confidential information).
4. Financial fraud – (e.g. an altered voice persuading someone to authorize a transfer).
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Which insurance policies may cover deepfake fraud?
1. Cyber Insurance
• Cyber insurance safeguards products against data breaches, phishing, and funds were being wrongly transferred based on cyber fraud.
• Now, certain may provide coverage now if you are a victim of AI impersonation scams and fraud.
2. Commercial General Liability (CGL)
• Provides protection against defamation claims or reputational harm.
• May apply, assuming someone puts out fake video of you and damages your brand.
3. Media Liability Insurance
• Covers claims of copyright and privacy claims.
• To be taken out if deepfakes lead to litigation over someone’s attempt to Enforce their intellectual property rights (or false portrayal claims).
4. Errors & Omissions (E&O)
4. Errors & Omissions (E&O)
This can be helpful to take care of a financial loss to a company from deepfake sourced misinformation.
5. Directors & Officers (D&O) Insurance
– This can help to protect corporate directors and officers if shareholders claim their negligence has resulted in not preventing AI sourced risks.
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Real-World Example
In one real-world case, criminals used AI voice cloning to imitate a CEO’s voice and issued a fraudulent transfer request for $243,000. The company was duped because the audio sounded indistinguishable from the legitimate executive.
Cases like these demonstrate that this type of fraud is no longer limited to just traditional fraud check because the appropriate insurance policy could be the difference between a recovery and a catastrophic loss.
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Ways to Protect Yourself
1. Audit Your Policies – Speak with your insurer and see whether or not your cyber or liability coverage can include AI sourced risks.
2. Strong Verification – Always confirm transfer approvals or sensitive requests with secondary authorisation.
3. Staff Training – Employees should be able to identify questionable requests from emails, phone calls or videos.
4. Look for Optional Coverage – Many insurers now have AI fraud endorsements that cover deepfake risks.
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Bottom Line
Deepfake fraud is no longer a theoretical risk issued by some academic paper- it is here, and is expanding. The best remedy is a combination of strong digital security, educated employees and renewed insurance.
If AI can trick your vision and make sure your insurance can protect your wallet.