What If My Company Computer is Hacked?

Jun 23, 2011 |

Funds transfer fraud and computer fraud are serious and growing threats to business. According to a 2008 survey by the Computer Security Institute, the average annual losses due to computer fraud were $289,000 and nearly $500,000 for financial fraud.

"Phishing" scams make it easier than ever for criminals to access your assets. Web-based commercial EFT origination applications are being targeted by malicious software, including Trojan Horse programs, key loggers and other spoofing techniques designed to circumvent online authentication methods. These attacks could result in monetary losses to financial institutions and their customers if not detected quickly.

Consider these examples:

A company's finance director opened an email with an attached zip file that contained a virus. The virus obtained the user ID and password to the company's bank account. Immediately thereafter, a fraudulent electronic wire transfer initiated by unknown persons caused $147,000 to be wired from the company's bank account to an unknown account.

A company's website was hacked by an employee of one of its customers who changed her employer's bank routing code on the website to her own. When the company paid her employer for services rendered, the money went directly into her bank account.

While internal controls are extremely important to guard against these threats, they are not foolproof. Crime insurance is an effective backstop if you expand the policy to include Computer Fraud and Funds Transfer Fraud coverage. It is recommended to have limits equivalent to employee dishonesty limits sufficient enough to protect against a catastrophic attack.

Post by Brian Sandy for TechAssure

TechAssure Association, Inc., is a non-profit organization founded in 2001 for insurance and risk management professionals dedicated to serving clients in the Technology, Life Sciences, Digital Media, and Venture Capital industries.

CyberRisks Are Real

May 11, 2011 |

Businesses from the local doctor's office to the Fortune 1000 live and breathe on their Information Technology applications, databases and computer systems.

Current Trends

If current trends continue, cyber insurance coverage just may take its place alongside workers' compensation, general liability, fire and auto insurance in the core commercial property and casualty package, meaning a business would be foolish to open its doors without it.

Indeed, for businesses such as online retailers, brokerages and some financial firms, the IT and data assets are the entire business—every bit as critical as the factory and warehouse are to the hard-goods manufacturer, or the vehicle fleet to a trucking company.

More and more companies are realizing that this reliance on IT creates a hornet's nest of risks that can result in crippling losses. that conventional insurance coverages won't respond to. These new issues call for a new category of coverage.

Comprehensive Cyber Risk Insurance Program

Cyber Liability – What is Covered under a Typical Policy?

Network damage to a third party's system:

• That prevents an authorized user from gaining access to the system
• Resulting from the transmission of a virus from the insured's system
• Due to the unauthorized access or disclosure of information residing on the insured's network or the network of a third party

Privacy injury and identity theft that result from a breach of network security:

• Including the unauthorized disclosure of non-public private information, such as an individual's name, address, telephone number, account relationships, Social Security number or credit card numbers
• Resulting from the failure to comply with any applicable privacy laws, e.g., HIPAA, GLBA, COPPA, Canadian Personal Information Protection and Electronic Documents Act and the European Union Data Protection Act

Cyber Liability – Who should buy this coverage?

• Retail and wholesale establishments that accept credit card transactions – online and offline
• Service occupations, such as printers, accountants, lawyers, etc.
• Manufacturers
• Financial services firms, including banks, insurance agents and mortgage brokers
• Medical offices, pharmaceutical companies and other healthcare service providers
• Any company that stores their employees' non-public private information on a network