Insurance Online : Cyber Risk Insurance & Email Piracy (BEC, Social Engineering Fraud)

As we have noted (here & here), Email Piracy, also called Business Email Compromise (BEC) and social engineering fraud, is a significant threat, and only a few Cyber Risk Insurance policies provide adequate protection from this type of attack.

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Insurance Online : Update: Investment Firms & Cyber Crime

Investment related firms should purchase Cyber Risk Insurance including coverage for loss of money and including social engineering fraud, and practice good risk management.

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Insurance Online : Investment Firms & Cyber Risk Exposure

Investment firms such as Registered Investment Advisors (RIAs) and Broker Dealers (BDs) need compliance and risk management measures to include Cyber Risk exposures and a comprehensive Cyber Risk Insurance policy.

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Insurance Online : Surplus Lines Market – Valuable

The Surplus Lines insurance market provides an alternative for unusual or higher risk insurance unavailable to purchasers from the standard market.

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Insurance Online : Dentists Threatened by Malware

Cyber Risk Insurance is important for dentists: The American Dental Association (ADA) mailed 37,000 thumb drives to members, and some of those drives may have inadvertently included malware.

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Insurance Online : Trustee Liability & E&O Insurance

Trustee liability claims are on the upswing, and trustees should have E&O insurance (professional liability or errors & omissions insurance) for protection. Trusts can be formed for many different purposes (see here, here and here), and the assets held can vary from liquid securities to fixed assets such as real estate. Trustees have a duty to the trust and its beneficiaries, and in some cases to third parties, increasing the magnitude and complexity of the exposure. According to Hinshaw & Culbertson, lawsuits against trustees are up (see here): Trust, probate and estate planning attorneys are charged with legal malpractice and breach of fiduciary duties more than any other single practice area… This escalation in litigation is likely to continue and...

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Insurance Online : Preventing Social Engineering Fraud

Social Engineering Fraud, also called email piracy or Business Email Compromise (BEC), is hard to prevent because it is based on deception (see here and here). While comprehensive protection is available within some Cyber Risk Insurance policies (also called Data Breach, Privacy and Network Security insurance coverage), a strong prevention program is also important. Here are a few prevention tips along with the sources: From our prior post, Tips for Preventing Email Piracy: Be suspicious of requests for secrecy or quick action Utilize a two-step verification process Know your customers & vendors From Chubb’s Guide to Preventing Social Engineering Fraud: It is essential that employees across an entire organization be educated and trained on how to detect and prevent this...

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Insurance Online : Law Firms are Cyber Targets

As we have noted in a prior post (see here), law firms have valuable information and are vulnerable to cyber attacks – and need Cyber Risk Insurance (also called Data Breach, Privacy and Network Security insurance coverage). Recent events have highlighted and heightened this exposure, starting with reports of attacks on large law firms. Reports from the FBI and others (see here, here, here and here) have noted that hackers have targeted the largest law firms in the US and have stolen confidential client information. Experts are speculating that confidential information was stolen to assist with trading on insider information, but it is too early to know what was stolen and why. In our prior post we noted why law...

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Insurance Online : State Data Breach Laws & Cyber Risk Insurance

State statutes dictate how an organization must respond to a data breach, and Cyber Risk Insurance (also called Data Breach, Privacy and Network Security insurance coverage) is typically structured to provide financial support for compliance with these Data Breach Laws. A summary of the laws is available on the BakerHostetler site here. Most states have passed laws setting out requirements for any organization which experiences a breach of personal information. While the regulations vary, most states define a breach and require some level of notice to both a responsible party, usually the Attorney General, and to potential victims. Importantly, these statutes generally apply to the location of the victim, not just the location of the organization. So a company doing...

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Insurance Online : EMV & Cyber Risk Insurance

The shift to credit cards embedded with chips and the related technology, called EMV, is already having an impact on Cyber Risk Insurance (also called Data Breach, Privacy and Network Security insurance) underwriting and rating. Some Cyber Risk Insurance underwriters have increased their rates for retail organizations and some are underwriting accounts more closely. While EMV technology is expected to reduce point of sale credit card fraud, it is unclear when this will happen. Only a small percentage of retail merchants are fully using the new technology and those that are not face liability for any credit card fraud within their system. Cyber Risk underwriters are concerned that insurance may pick up claims for merchants that have not adopted the...

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Insurance Online : Cyber Risk Insurance Coverage is Critical

Cyber Risk Insurance (also called Data Breach, Privacy and Network Security insurance coverage) continues to evolve as the insurers try to keep up with rapidly changing technology and the growth of cyber crime. For a variety of reasons, including this evolution, Cyber Risk Insurance policies are not all the same. KrebsonSecurity notes that an insured is suing its Cyber Risk insurer for failing to cover a cyber crime loss (see here). It appears that the policy in question is actually a Crime policy, not a Cyber Risk Insurance policy. But the situation is a good example of the challenges of obtaining proper Cyber Risk coverage. We are not surprised by the suit and expect more of these situations. Why: Exposures...

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Insurance Online : Tips for Preventing Email Piracy

As we have noted previously (see here and here), email piracy, also called Business Email Compromise (BEC), is a serious threat. Because the attacks are based on deception and human behavior, traditional technology protections are not likely to help. Cyber Risk Insurance policies can provide protection, but prevention is a critical component of any security plan. Here are a few tips from experts and sources of information for consideration: From the FBI (here, here and here): Be suspicious of requests for secrecy or pressure to take action quickly. Consider financial security procedures that include a two-step verification process Create intrusion detection system rules that flag e-mails with extensions that are similar to company e-mail but not exactly the same. For...

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Insurance Online : Surplus Lines Insurance Growth in a Competitive Market

The Surplus Lines Insurance (E&S Insurance) market continues to grow despite the competitive market, with premiums increasing 6.7% in 2014 and 27% from 2010 to 2014. Why? An Insurance Journal article (see here) provides some insights, including commentary from the author of this Specialty Insurance Blog. Additional information is contained in AM Best’s annual report on the Surplus Lines industry entitled 2014 Special Report U.S. Surplus Lines – Segment Review. Growth was driven by a combination of product diversification, underwriting discipline and increasing exposures. Increased specialization in both distribution and underwriting organizations, and product customization, can also be credited with encouraging growth in surplus lines. A key product impacting Surplus Lines insurance growth is Cyber Risk Insurance, also called Data...

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Insurance Online : Cyber Risk Insurance for Accountants

Like most businesses, accountants have cyber exposure, and should be buying Cyber Risk Insurance (also called Cyber Liability Insurance, Data Breach Insurance, Network Security Insurance or Privacy Insurance). Accountants also have a more significant exposure than many other businesses because the information they retain includes detailed personal financial information that can have high value to cyber criminals. A recent article by the AICPA (see here) not only highlights the need for Cyber Risk Insurance, but also is an example of the type of information insurance buyers are seeing outside of the normal insurance industry marketing messages on Cyber Risk exposures. It notes that a CPA firm’s central concern is the loss of client data, and that a Cyber Risk Insurance...

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Insurance Online : Customer Assistance – Handling Social Media Complaints & Avoiding a Suit

Your customers may have adverse posts on social media sites, and appropriating handling these complaints can go a long ways towards avoiding a suit and an insurance claim. A Forbes article (see here) provides tips on how and how not to handle social media complaints. Avoid triggering the Streisand Effect (intimidation, litigation) Reach out directly to online complainers – with a thoughtful and positive response Avoid the social media fiasco formula – respond quickly Prevent online complaints in the first place – through accessibility, not through force or legalese Other articles on responding to social media complaints can be found here and here. Tennant Risk Services is a specialty wholesale broker and underwriting manager, and delivers expertise, markets and exemplary...

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Insurance Online : The Cyber Risk Insurance Market – Update

The Cyber Risk Insurance market has been growing rapidly (see our prior post), and is now estimated at $2.5 billion for 2014. This market estimate is from a study entitled Insight Report: The Future of Cyber Risk Insurance by Timetric (see here & here). The report also estimated total global cyber crime losses at $445 billion. As the Insight Report notes, Cyber Risk Insurance (also called Data Breach Insurance, Privacy Insurance or Network Security Insurance) is an essential coverage to protect from data breaches and attacks of all types, and coverages is available at reasonable pricing for businesses of all types. Tennant Risk Services is a specialty wholesale broker and underwriting manager, and delivers expertise, markets and exemplary services to...

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Insurance Online : The Cyber Risk Insurance Market

There has been significant commentary on the market for Cyber Risk insurance (see our prior post here), some positive and some commentary not so much. We provide Cyber Risk insurance to a wide range of small to medium sized organizations utilizing a range of insurance markets, and we see a very robust market for coverage. It does take some effort and expertise to navigate the market, and as a wholesale broker we support our retail insurance agency clients in providing cyber risk insurance. Our key points on the current market: Many insurers provide Cyber Risk Insurance Coverage is reasonably priced Cyber Risk Insurance can be comprehensive, but not all forms are Forms vary considerably and can be tailored to a...

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Insurance Online : Cyber Risk Insurance – Evolving, Complex

Cyber Risk Insurance is a critical coverage for attorneys, and the American Bar Association has a Guide to Cyber Coverage (see here). While the Guide acknowledges the active market for Cyber Risk Insurance, that comprehensive coverage is available, and that coverage changes constantly, the article claims that no one understands the coverage. The article also claims that polices are “too unnecessarily complex for their own good.” We have a different perspective. While cyber exposures are relatively new and changing quickly, and the application of coverage is, in many cases, untested, there are experts in the cyber risk area. And the policies are complex, and for good reason. In some cases they are very comprehensive. Cyber policies cover a wide range...

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Insurance Online : EHR Malpractice – Records Risk

The advent of electronic records has established a new opportunity for errors, which some have called Electronic Health Record (EHR) malpractice, and a new exposure for both medical malpractice insurance underwriters and for Cyber Risk Insurance underwriters. Health records are a critical component of any medical malpractice case, and can be beneficial or detrimental depending on how well the records are maintained. And these health records are all going electronic. Medical practitioners utilize and rely on electronic health records to provide care, and inaccuracies in the records can have significant consequences, both legal and operational. Health records are critical in medical malpractice litigation (see here): In the overwhelming majority of cases, health records are the “single-most important piece of evidence”...

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Insurance Online : The Cyber Risk Insurance Market & the DHS Industry Working Session

The Department of Homeland Security sponsored an insurance industry working session (see here) to find ways to generate a more robust Cyber Risk Insurance market. The result so far has been a readout report (here). According to the Insurance Working Session Readout Report three areas could lead to a more robust market: Cyber incident information sharing/data repository – the idea here is to create a secure method to pool and share cyber incident information on an anonymized basis in a database accessible by insurers. Cyber incident consequence analysis – New data and modeling techniques would help insurers assess the loss value of a cyber-attack on critical infrastructure, and also the impact of various cyber risk management techniques. Most importantly, the...

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