Don’t think it can’t happen to you!

April 25, 2017

Imagine: you receive an email with an attachment from someone you know with a subject that makes sense. You may have even been expecting a similar email – you open it. Once opened, your whole computer is infected with a virus and all files are locked. Maybe you opened the email on your work computer; it syncs to your server. Your entire company’s files are locked! Now what? How do you get the files back? Is this covered by insurance? Below is an example.

Upatre 131113 account report


Imagine this scenario: you are the accountant, you receive an invoice and a request from a regular vendor; it’s a bill you pay monthly. They email you stating they’ve closed their bank account and opened a new one. They provide the new numbers and ask you to update your system. You oblige, update the numbers and pay the invoice electronically as usual. A few weeks later the vendor contacts you and asks why you haven’t paid. You communicate payment was made and provide the payment date and confirmation. They confirm, it’s the wrong account; they didn’t open a new bank account. You provide the email correspondence and after investigation, you find out the request you received didn’t come from the vendor, they simply POSED as the vendor. Now what? You are out a few thousand dollars and you need to pay the outstanding invoice. Is this covered by your insurance?

Below is an example. It appears the email came from someone you know, however the email link {the blue part} has an obscure email address.

CEO Spoof


Enter: Cyber Insurance–the word is reminiscent of stereotypical hacking from Hollywood movies. Peter MacDonald of Murray & MacDonald Insurances gives an example: “One of the easiest ways to think about this risk exposure and potential insurance solutions is to start with this: imagine that all your filing cabinets with confidential information were destroyed in a fire. Or worse, stolen. How would that affect your business and your client relationships? Now, pause for a minute and think that often times all that data is sitting on your smartphone. Or a USB drive. Ready to be copied, stolen, encrypted, locked up, at the click of a button.”

Cyber Liability insurance is designed to cover users of technology services or products. Policies are intended to cover a variety of both liability and property losses that may result when a business engages in various electronic activities, such as selling on the Internet or collecting data within its internal electronic network. Cyber often has the following components: Errors & Omissions, Media Liability, Network Security and Privacy.

In today’s modern society, technology enables us to be more efficient than ever before; at the same time, it exposes us to more risk due to the ease a security breach can happen. The examples I gave were email related, however credit card usage poses significant risk. Do you recall the Home Depot cardholder data breach in 2014? They recently {March 2017} reached a settlement to pay banks $25 million; this is in addition to $134.5 million already paid out to Visa, Mastercard and other banks. The total cost of their data breach is approaching $179 million between paying banks, consumers, etc.

“There are only two types of companies: Those that have been hacked, and those that will be.” Robert Mueller, Director of the FBI, March 2012

“The next Pearl Harbor we confront could very well be a cyber attached that cripples our power system, our grid, our security systems, our financial systems, and our governmental systems.” Secretary of Defense Leon E Panetta, October 2012

People and businesses are affected by cyber security risks every day – an email you opened locks your company’s files, an email posing as someone you know, an embarrassing post on a social media account, credit cards hacked, etc. How can you protect yourself?

As a consumer, use caution as it relates to your email, text messages, social media use, credit card and PIN transactions. Use a chip enabled card as often as possible which gives each transaction a unique code making it difficult to be stolen.

Ask your insurance advisor what exposures you may have and how you can safeguard yourself and your business. Does your renter or homeowner policy have an identity protection endorsement? What does it take to obtain Cyber Insurance for your business? You’ve worked hard to build your business, protect your investment with Cyber Insurance. Speaking with your insurance advisor will help you make an informed decision and give you peace of mind.