February 05, 2020 | Cyber Security, Industry Insights

The Need for Cyber Insurance

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Fraud. It happens every day. We think of protecting our personal interests, but what about our businesses, employees and clients? Are you prepared to handle the potentially crippling ramifications if your business is hacked or held for ransom? What is cyber insurance? Dealing with cyber crime is not as simple as paying a ransom and moving on.

Freight forwarders are at heightened risk for targeting by cyber criminals because all of their business activities are conducted electronically. And while familiarity with the risks grows daily, cyber crime is still a relatively new exposure in the industry. Small and mid-size freight forwarders and logistics providers are at increasing risk of attack because they are typically not as secure, making them EASY TARGETS.

To learn more about cyber claims and how Roanoke Trade can address your needs, listen to Rick Bridges, one of our experts in the field.

The aim of a ransomware attack is quite simple: lock and encrypt a computer, then demand a ransom to restore access. Cyber criminals are looking to penetrate a company’s systems by whatever means possible  - but that’s only the beginning. While ransomware requests can potentially cost a company hundreds of thousands of dollars, the real costs are incurred after the fact. Oftentimes a forensic analysis must be conducted to identify and close access points, and there may be state and/or federal regulatory requirements of notifying customers of any breach of data. This is how businesses  –  especially the small to midsized ones  -  can be financially and reputationally decimated by an attack. This is why having the appropriate insurance coverage can be the difference between recovering or closing the doors for good.

In addition to ransomware attacks, one of the biggest exposures facing the industry is social engineering exposures or phishing attempts. This is where a predator, posing as a trusted partner, sends an email, instant message, or text message requesting banking information, business data, and the like. The recipient is then tricked into clicking a seemingly legitimate yet malicious link thereby allowing access to sensitive information at that point or at a future time. Most common is a simple funds transfer request that looks very legitimate. These exposures have the potential to be crippling to a business.

So how does a small to midsized freight forwarder prepare itself to combat such an invasion and what is cyber insurance? There’s not one simple solution, rather a multi-tiered approach is in order.

  1. REALITY - It can happen to you. Acknowledge the fact that cyber crime exists and no company is too big or too small to be breached. This is the single largest new area of claims for freight forwarders and logistics providers.
  2. PREPAREDNESS - Educate your employees on the dangers of cyber risks and how they can unknowingly be inviting criminals into the company. For instance, don’t download things that are pathways for cyber criminals.
  3. BE PROACTIVE - Arm your IT department with information so they can deal with cyber crime from a proactive position rather than a reactive one. Audit your IT infrastructure and cyber footprint to ensure there’s an understanding of your exposure.
  4. GET INSURED - Make sure that the money you spend on insurance is going to be worth it in responding to a claim. Find yourself an advocate who will identify your exposures which in turn will give you confidence that the policy will respond.

We can help you assess your company’s risk for cyber crime with a few simple questions. Please contact us at 1-800-ROANOKE or reach out directly to your local Roanoke office to find out how we can provide you with the insurance programs you need to be properly protected. Don’t be the next victim.

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