Criminal bank account takeovers are getting more sophisticated and brazen, and the right Cyber Risk insurance coverage is essential to protect your business. A recent incident is a fascinating example. This was first reported by Brian Krebs of Krebs on Security (see here). In addition to the reporting, he also was the first to inform the victim about the theft.
Hackers stole the bank account access information of a construction company and then stole $900,000 in a coordinated series of wire and ACH transfers. The criminals withdrew the cash and used 62 different mules to immediately fly the cash out of the country. By the time the construction company knew what happened, it was too late.
Privacy laws are also constantly evolving, creating new responsibilities for businesses. If you experience a privacy or security breach, will you know what to do? A new and inexpensive insurance is available for this risk. Called by different names, such as Privacy, Network Security, Data Breach or Cyber Risk Insurance, this protection is critical for all organizations. Don’t believe the lie that it won’t happen to you. Businesses of all sizes are at risk for cyber-attacks and data breaches.
What is Cyber Insurance?
Protection from cyber and technology risks, such as:
- loss or inadvertent disclosure of confidential private information, like clients’ or employees’ social security numbers, bank account numbers or credit card numbers
- computer viruses or hacking resulting in damage / disruption to computer systems, or theft of private information
What does it cover?
- Claims made by clients or employees
- Regulatory proceedings, fines and penalties relating to privacy laws
- Costs to notify affected individuals
- Costs to restore data and computer programs damaged by hackers / virus
- Business interruption and extra expense due to a breach
- Some policies also cover loss of money due to hacking
Who needs it?
Anyone who collects or stores private information! Most businesses require confidential information from clients in order to provide services. The use of technology has made us more efficient, but it has also increased the challenge of protecting private information from accidental or malicious actions.
Why should I buy it?
Regardless of the amount of time dedicated to security, or the sophistication of controls, data breaches continue to occur at an alarming rate. Additionally, hackers are increasingly targeting small businesses that may not have sophisticated security measures in place. The average cost of a data breach is $201* per customer record compromised. Cyber liability policies cover direct costs to address a breach, plus legal expenses and settlements from lawsuits.
*according to The Ponemon Institute’s 2014 annual study. The Ponemon Institute is an industry leader conducting independent research on privacy, data protection and information security. Visit www.ponemon.org for more details.
Isn’t this covered by one of my other policies?
Probably not. Most policies provide no coverage at all. Even if coverage is provided, it is extremely limited. A standalone policy dedicated to this risk ensures there is coverage not only for legal expenses and liability, but also direct costs to address a breach.
Bottom Line
Cyber-attacks are real, it’s not just big companies like Home Depot and Target at risk. Every day more and more small businesses are getting hacked and the costs associated can put you out of business. You owe it to your customers and employees who trusted your business with their private information to look into this extremely valuable and inexpensive coverage.
Want to learn more? – Let us contact you to discuss further.
