When COVID-19 erupted globally, hackers doubled down on their cyber attacks like never before. By April 2020, the World Health Organization (WHO), reported a fivefold increase in cyber attacks directed at its employees. As the pandemic raged on, a cyber crisis continued with attacks on health care organizations, vulnerable Americans awaiting their government stimulus checks, children attending school via virtual classrooms, and even Twitter.
Cyber crime has become a harsh reality for both business owners and individuals. As our reliance on technology shows no signs of slowing down, cyber criminals are working around the clock for new ways to thwart security systems, gain unauthorized access, and wreak havoc. Business owners need to be prepared for the day they fall victim to an attack. While cyber security efforts can greatly reduce the risk of a successful attack, no business should continue another day without a cyber insurance policy.
Whether a small business or a large corporation, everyone is a target. If you or your clients are still wondering if you need a cyber policy, you could already be too late.
Cyber Insurance: Why Businesses Need It, and Trust Us…They Need It
A business can suffer a number of door-closing catastrophes: a brick and mortar store could suffer a fire, an engineer could be liable for a structural default in a new building, or a grocery store could face the damages of a slip-and-fall-injury claim. So why is everyone focusing on cyber risk?
The largest challenge that cyber crime presents is its ever-evolving nature. A business could be up-to-date and prepared one day, and suddenly running on dated software and unaware of the newest threat the next. Cyber criminals work out new, unsuspecting, and more sophisticated crimes every day. Addressing an organization’s cyber risk is not a one-and-done task to check off, but is also a constant battle to stay current and vigilant against these attacks.
Many business owners have believed a number of common misconceptions about cyber insurance, including:
- Cyber insurance doesn’t provide comprehensive coverage
- Cyber insurance isn’t worth the premium expense
- Cyber criminals aren’t targeting their small business or industry
There’s really no excuse to conduct business while uninsured against cyber crime in 2021. Cyber insurance coverage has evolved extensively since its early 90s beginnings to provide broad, comprehensive coverage. The cost of the insurance premium is a small price to pay in comparison to the damages of a cyber event and potential breach of millions of customers’ sensitive information. And last, a cyber event will happen and everyone is a target.
The cyber insurance products of today provide comprehensive coverage, including:
- IT Forensic Costs
- Notification Costs
- Credit Protection Costs
- Crisis Management Costs
- Crime & Social Engineering
- Costs related to the breach of Personally Identifiable Information (PII), including:
- Credit card numbers
- Social security numbers
- Bank account information
- Personal health information
- Sensitive corporate information
- Claims arising from:
- Breach of contract
- Negligent protection of data
- Network security breaches
- Transmission of software viruses
- Denial of service attacks
- Defense of regulatory actions related to a breach
- PCI fines and penalties and assessments
- Multi-Media Coverage
- Cyber Extortion
- Cyber Business Interruption
- Hacker Damage or Digital Asset Damage
Unlucky Law Firm: A Cyber Claim Example
To fully understand the impact a cyber insurance policy can have on a company or organization, consider this cyber claim example:
The financial controller of a law firm received a call from their bank advising of suspicious activity on their account and requested the firm’s password and pin to implement a freeze. The unsuspecting financial controller provided this information. The next day, the controller contacted their bank and learned there was no record of their previous conversation, however, the firm’s funds had been wire transferred to a number of overseas accounts. As these transactions had been authorized by the financial controller, there was nothing the bank could do.
As the firm had a cyber policy with cyber crime coverage for social engineering, they recovered the stolen funds, less their policy deductible, through their cyber insurance policy.
Cyber criminals are becoming more and more sophisticated in their attacks and they continue to leverage human error. Even the most vigilant employees can still fall for their tricks, leaving their organization seriously exposed.
Cyber Attacks to Know in 2021
Staying educated and having the ability to identify risks is one of the best ways a business can protect itself.
This is a form of malware that gains unauthorized access to a system, encrypts data or files, and holds them ransom, sometimes with the threat of a data breach, in exchange for a demand.
- Social Engineering
These attacks trick a user into giving away private information, such as login credentials, account information, or pin numbers, in order to gain unauthorized access to a network. These kinds of attacks are often followed by a ransom demand.
- Remote Desktop Vulnerabilities
With so many employees logging into work remotely, remote desktop portals can be a serious vulnerability and access point for hackers. It’s important that all remote desktop portals are kept up to date to ensure they’re secure.
Some of the most effective risk management steps that companies can take to reduce their cyber risk are quite simple. This includes:
- Using strong, complicated passwords
- Using multi-factor authentication for all logins
- Keeping all networks, software, and hardware up to date at all times
How to Get Protected
At ProWriters, we understand that—for many brokers—the cyber industry and cyber coverage can be overwhelming and complicated.
We strive to make brokers’ jobs even easier with our FREE downloadable broker resources. These complimentary tools are designed to help brokers sell cyber and educational material to help them better understand the industry and product.
In addition, our Cyber IQ Comparative Rate Portal allows brokers to instantly compare multiple quotes from multiple carriers in just minutes to save time and find their clients the best coverage.
For more information on protecting your clients with a cyber insurance policy, contact a ProWriters expert today.