Increased Frequency of Cyber Breaches Spurs The Newest Evolution of Cyber Insurance Coverage
Increased Frequency of Cyber Breaches Spurs The Newest Evolution of Cyber Insurance Coverage
In 2015, I was asked to lead a panel discussion at the NCBFAA on the subject of Cyber Security, pertaining specifically to existing insurance coverages, which could effectively protect exposures. At that time, major cyber events—and serious cyber breaches related to the shipping/importing industries—were still somewhat uncommon and therefore generally not considered an overly serious business threat.
Industry leaders had other priority issues to address—such as ACE deployment and development—and so, even as a licensed insurance agent, my own professional analysis of coverage options at the time was narrow in terms of scope and so I could not in good faith promote or recommend a product/service whose applications seemed unclear or perhaps not entirely necessary.
But let’s flash forward to today when major, catastrophic cyber breaches are evident reality as well as an almost constant threat successfully targeting our government, hospital, and vital supply chain infrastructures, as well as any number of critical business functions, from industries both large and small. Savvy hackers have perfected their playbook and are now constantly, tirelessly searching for openings which will conveniently allow them to crash your servers, cripple your critical online infrastructure and potentially hold your company ransom.
As only one negative result on our business landscape, near ubiquitous financial services emerging in response to the crisis are now aggressively hawking cyber security “solutions” which all seem to feature the identical disclaimer:
“You may not be able to eliminate the risk of breach completely, but you can increase your odds…” This, of course, is a security “solution” that does not exactly convey confidence or inspire trust. Yet, as this threat continues to expand, when speaking to clients nationwide on this specific issue, I’ve noticed a troubling trend.
Logistics professionals I’ve known and worked hand-in-hand with for many years have begun to divulge details about cyber-breaches which their own companies have experienced directly. The cases are disturbingly varied, destructive, divisive and, in far too many cases, could have been avoided entirely or at least responsibly mitigated with proper insurance protection:
• Our system was cracked through a single unsecured wireless router in our office.
• Our files were hacked via an employee accessing our system remotely through theirunsecured online home system.
• Our system was crashed by an employee negligently clicking an email and releasing highly destructive malware.
• Our firewall was breached through a backdoor “smart” office system installed for climate controlled convenience.
But what really focused my professional attention in regard to shipping was the overwhelming and ongoing stress felt by their businesses not being able to even access an ABI system, or even simply connect to ACE to clear entries or book cargo! In my experience, very few logistics businesses can successfully survive such a complete and catastrophic shut down for a few hours, let alone days or weeks.
The Evolving Response to the Evolving Threat
In many of these cases experienced logistics professionals had dangerously viewed cyber-breaches as a somewhat nagging potential issue—something that happens to other businesses—but not as a real existential threat to their own business’ financial security. Thankfully for some, certain cases were relatively inexpensive to make right, although the loss of time spent down/cyber-crippled is always difficult to accurately measure for any bottom-line business future.
The most common denominator—from my perspective—was that each business had now come to understand the threat as very real, and every logistics professional was now weighing cyber-coverage as not only an option, but as the smart option moving forward in direct response to the viable risk. Coverage options like data recovery, funds transfer fraud, ranson payments, and lost profits have become more client-friendly and more cost effective right now. (indeed Forbes recently reported that, due to increased demand, business cyber insurance will likely increase by 20-30% every year until 2025)
As an industry professional who has built my career working directly with trade professionals, I feel more than confident the time is right now for every company to explore their evolving coverage options and to responsibly protect your business from real risk moving forward. Working towards this common goal, IB&M is a full service insurance broker which means that we work directly for you, and not the insurance company. It also means we explore multiple coverage options from multiple markets to see which particular option and which specific price plan is the best fit for your business.
The current evolution of coverage options makes it more convenient than ever to take a serious look at protecting your business against the harsh reality of lurking cyber threats.
-Jason Wieselman, V.P. Business Development
IB&M
Click here to start a quote with IB&M