It was a beautiful sunny day in June of 2016. I came into the office, got a cup of coffee, chatted up my staff in my office, and sat down to my computer ready to tackle the day ahead of me. I got a call from one of my agents and the conversation went something like this:
Agent: “My email has been hacked’
Me: “Impossible! That doesn’t happen in real life, get back to work”
Agent: “No really, I am getting calls from my clients saying they have a suspicious email from me but it says it has important information and they need to open it up”
So what exactly happened here? My agent was in the process of obtaining life insurance for two business owners that were partners in business. The life insurance was intended to fund a buy-sell agreement. Due to the size of these policies and what they were intended for the life insurance company was asking for financial statements and other business information. During this process we got an email from one of the partners with an attachment that stated “Important Business Information Please Open Immediately”. My agent opened the email and the attachment was empty, or so he thought it was empty. What perfect timing, we were expecting important information from a client and we get an email from him telling us he has important business information, expect it was a hacker and now our system has been exposed. When my agent clicked on the attachment it allowed the hackers to access our email system and allowed them to send the exact same email to our clients.
So what does a business owner do in a situation like this? Do you ignore it and hope nothing comes of it? Do you send an email out to your customers stating “I’VE BEEN HACKED DON’T OPEN MY EMAILS!!!!”- And then hope nothing comes of it? Or were you smart enough to purchase a Cyber Liability Insurance Policy? Luckily for me I had the last option available. All I had to do was call the 1-800 number on the first page of my insurance policy and tell them what happened. Within the hour I received a phone call from a law firm that specializes in Cyber Liability. They were able to guide me through the process of what needed to be done to legally navigate this issue.
I also was put in touch with a firm that handles the forensics and IT issues associated with hacking. They were able to quickly get into my system, find out what happened, and identify what information was exposed. At the end of the day roughly 360 individuals names and Drivers Licenses were exposed, and an additional 20 Individuals with Social Security Numbers were exposed, one of them being my largest and wealthiest clients.
Over the next month we worked together with the law firm to properly notify everyone involved, to comply with all state regulations, and to provide credit monitoring for a year for everyone whose information was exposed. Our policy also would have covered us for defense cost and any damages to those individuals had their information been used. Luckily that didn’t happen.
This all sounds like a lot work doesn’t it? Well I dialed a 1-800 number and all of that work was done for me besides me spending probably an hour or two of my time on conference calls getting updated on what was going on. I paid a $2,500 deductible. When it was all said and done my claim exceeded $67,000!
This is just one example of what could happen, and the hackers are ahead of the game. How about coming to work to find all of your computers locked with a message on your screen “follow these directions to procure $2,000 of bitcoin, wire it to this foreign bank, and we will turn your computers back on”? Wow, I’ve always wanted to learn how to mine bitcoin!!!! Would you like some guidance in a matter like this? The feeling of finding out you have been hacked without a cyber policy is probably similar to watching your uninsured building burn, except your local fire department can extinguish a fire. Don’t bother calling your local attorney or IT professional, they most likely won’t know what to do.
Every business that uses computers needs to be protected by a Cyber Liability Insurance Policy. Over the past few years as the insurance industry has gathered more data on claims and has a better understanding of the risks that are out there. The costs of these policies has come down dramatically and companies have tailored their coverage to fit specific industries. At Beacon Insurance Group we are able to provide tailored coverage for you specific industry at very competitive prices. Most of the time we are able to provide instant quotes from multiple carriers by answering five simple questions. A business operating in the 21st century simply cannot afford to not have a Cyber Liability Insurance program.