It is fitting that October, the spookiest month of the year, is also Cyber Liability Awareness Month. Cyber scams and attacks are definitely a creepy part of commerce nowadays. Thankfully, there are insurance products to help protect and prevent those tricksters from harming your business. You might not be aware of just how much power a cyber attack wields, so to give you a better understanding I’ll share a truly frightening statistic – just about 60% of hacked small and medium sized businesses close within 6 months.

Many of us have received an email from a Nigerian Prince, or maybe a call from someone saying a family member has been arrested and they urgently need you to wire them money - or better yet, an IRS impersonator threatening you regarding an outstanding tax balance. The point is, the scammers have gotten smarter, but so have we. There is an insurance product now that will protect you from hackers and wire fraud, so you won’t have to pay the penalty for malicious actions taken against you or your business. Now, that doesn’t mean everything is covered, so be sure to review the limits with your agent to better understand what is included and excluded in your Cyber Liability policy. As most businesses have unique risks, there are additional ancillary coverages to make sure you have the best possible coverages for your needs.

Unfortunately, Florida is one of the worst states for fraud and cyber threats. In fact, it ranked 2nd overall for “State with Most Identity Theft & Fraud” based on the number of reported complaints/arrests, financial losses, & the presence/absence of state legislation providing protection. Our state also ranked 3rd for “Most Identity Theft Complaints per Capita” after D.C. & Michigan and tied for 1st with D.C. & Georgia for “Most Fraud Complaints per Capita.” In 2002 California was the first state to have state breach laws, now all 50 states have legislation. Which is why we’d like to take the time to inform you of the most frequent types of attacks and ways you can protect yourself and your business from them.

Type of Attacks:

The type of attack you have probably heard about most frequently relates to direct attacks on your finances or credit, which we previously discussed. Identity fraud is also quite common, including an impersonator racking up medical expenses linked to your social security number or even someone poaching your tax refund! You have also most likely heard or been a victim of gas pumps plagued with skimmers, machines which steal credit card information. What you may not realize, is that those skimmers expose the unsuspecting business owner to possible lawsuits and/or lost revenue. As we come to rely more and more on technology in the workplace to increase efficiency and ease of business, we become more at risk for damaging business interruptions. Regrettably, almost 90% of businesses are now at risk of becoming a victim of cyber assault. Historically, hackers were primarily focused on stealing the personal data of the business’ customers and spreading computer viruses like malware that affect the device’s functionality. Another more publicized type of a cyber security breach is what has affected companies like Target, Yahoo, and Experian to name a few. Network Disruption is when your 3rd party vendors like your phone, internet or email providers are attacked, impacting their network chain of customers or leaving their customers without service. However, now it is quite common to have a more malicious version, ransomware, infiltrate your network, leading to complete business interruption with what has been deemed Cyber Extortion. This term encompasses anything relating to someone holding your data/devices hostage until you pay ransom to regain control. Now, even your business equipment can be hacked! Products that use the Internet of Things (IoT) like a refrigeration trucker’s thermostat that is centrally controlled, is logistically helpful because it can be monitored from a command location instead of needing to be manually adjusted, but it also creates a new risk of being hacked.

Ways to Protect:

Protect yourself by safeguarding your information, shredding important documents, monitoring your credit reports as well as your bank accounts, including not using debit whenever possible. Make sure your computers/electronic devices have current and extensive protection in place. Also, consider freezing your credit if you are not planning on making any big purchases in the near future. Preparing for the possibility of an attack on your business is crucial and implementing effective and functional security measures is the best defense. Have a plan in place for damage control, including backup recovery practices. Keep your computer and website security certifications functional and current. And of course, have a cyber liability insurance policy in place to minimize your response expenses. An incredible benefit of some cyber liability policies includes having a team of experts at your disposal to help you navigate the loss. Your team could include lawyers, PR managers, forensic researchers and technology experts all working together to contain the threat and restore access to your critical systems as quickly as possible. It’s also important to note that if you are attacked, speed is of the essence. The quicker the response time, the better chance you have at mitigating the impact on your business.

As technology continues to evolve, exposures to cyber risk also change so evaluating your coverage needs should be an ongoing conversation with your staff and insurance agent. Be #CyberAware and protect your business from what could be lurking in the shadows.

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LSJ Insurance Agency Inc., Insurance Agency, Maitland, FL