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Is Your Company Cyber Covered?


Your company is likely insured to cover a variety of business risks. Some of the most common business coverages include general liability insurance, product liability insurance, professional liability insurance, commercial property insurance and perhaps some other specialty coverages depending on your business. So, as a business manager, you might think, I am covered. Well, it might be time for an insurance review that includes a relatively new, yet potentially devastating risk…cyber crime.

Most insurance companies that provide commercial property policies exclude electronic data under the definition of “covered property.” General liability coverages are designed for bodily injury or property damage which are narrowly defined in the policy. Electronic data is usually excluded under the definition of “covered property”. Personal and advertising injury excludes infringement of copyright, patent, trademark or trade secret loss which are often cyber targets.

Insurance companies and their actuarial research and tables have not kept pace with the blazing advancement in cyber technology. While technology continues to advance at a rapid pace, the insurance industry is struggling to keep up. There are, however, some companies that are developing and marketing cyber insurance policies to cover the potentially devastating effects from a cyber attack. AIG, for example, has introduced a stand alone policy called “CyberEdge.” that offers coverage against many cyber risks.

Many large companies mostly in developed economies are working with their insurers writing specific risk policies that provide coverage for business interruption, liability, remediation costs and other damages caused by cyber attacks. The cyber insurance industry is currently estimated to be about a $4 billion a year business and growing fast. Here are a few reasons for growth in cyber insurance…

Target - Data breach of 41 million customers credit card information in which Target settled for US$18 Million Anthem Health Care - Data breach exposed personal information of millions of patient records that Anthem settled for US$115 Million JP Morgan - The largest bank in the United States was hit by a breach where hackers obtained personal information including Social Security numbers of 76 million households and 7 million businesses. Subsequently, the bank has increased its cyber security budget to US$250 million per year.

A Ponemon Institute report found that the average cost of data breach for the 383 participating companies in 12 countries was about US$4 million. Two of the “megatrends” discussed in the report are that 1) Regulated industries such as healthcare and financial have the most costly breaches because of fines and a higher than average rate of lost business and customers. 2) Investments in certain data loss prevention controls and activities such as encryption and endpoint security solutions are important for preventing data breaches.

Similar to many other types of coverages, the insurance companies are working on developing risk assessment practices in order to better manage the cyber vulnerability score of applicants. Of course, the higher the risk score, the more the applicant will pay for coverage if a policy is underwritten. Many insurance companies, lacking industry-wide standardized practices are using Payment Card Industry (PCI) data security standards as a baseline for providing coverage. These standards require specific security practices such as firewall protection as well as other intrusion, encryption and data loss protections. An organization that is not in compliance with PCI standards will find it difficult to obtain coverage.

Strong network protection starts with a Next Generation Firewall (NGFW) that integrates intrusion protection along with traditional firewall protection. Additional appliances such as Data Loss Protection (DLP) provide another layer of protection helping prevent the download of protected information by unauthorized devices. Other critical appliances that identify traffic anomalies, block suspicious traffic and help weed out malware are coming to market every day.

Good news and bad news is the pace of malware protection innovation. Good that there is a constant flow of new technology coming to market with each new appliance covering a previously under-protected vulnerability. Bad that deploying numerous specialized appliances on every link of a complex network is very costly and can impact reliability and availability of networks to legitimate users. Fortunately there is one more “good” to this story.

Security appliances can be connected directly to links or can be “brokered” through intelligent visibility appliances that are designed to connect numerous appliances. These intelligent TAPS and Packet Brokers can map network traffic through connected appliances and bypass problem units. The port mapping and power-fail protections keep networks “alive” even when certain appliances are “dead”.

To summarize, cyber attacks are increasing in sophistication and frequency. A well written and rated cyber insurance policy can protect businesses from costly breaches and the associated liabilities. In order to get the best coverage at a reasonable rate, review your security profile prior to applying for coverage. The cost of a strong security infrastructure can be more than offset by lower insurance rates and by defeating attacks before the damage is done.

Posted: 15/08/2017 17:36:42 by Network Critical with 0 comments

Crime and Punishment…and Protection


Crime

The European Cybercrime Center announced in its 2016 Internet Organized Crime Threat Assessment report. Here is a quote from the organization. “The volume, scope and material cost of cybercrime all remain on an upward trend and have reached very high levels.” Another report from BT and KPMG stated that, “Criminal groups who mount a constant assault on legitimate businesses are not simply members of an amorphous underworld. They are, in fact operated as rational hard-nosed businesses with their own clearly defined business models and money making scams.”

Given the above information here is an interesting report. According to a Zurich Insurance Group survey of small and medium sized businesses, about 11 percent of respondents said they worried about cyber-crime. This is not a typo and your eyes are not playing tricks. Also note, this is not a small sample. The survey polled 2600 C-level executives from 13 countries for this study. However, even though the number is small, it is the fastest growing perceived business risk category. So, it appears that cyber-crime awareness is relatively weak in small and medium businesses, it is growing.

Law enforcement, however, is paying attention. About 200 delegates from 56 countries met in Singapore the last week of September to discuss best practices for overcoming the many steep challenges of fighting cyber-crime and bringing perpetrators to justice.

Punishment
As reported in SC Magazine UK, Nazariy Markuta, a hacker for D33D Company, has been convicted and will spend two years in prison by the UK’s National Crime Agency. Two years! That is not a typo either, two years! Now, this is a guy who is believed to be involved in the leak of 450,000 email addresses and passwords from Yahoo!’s contributor network. Further, when he was arrested, agents found thousands or payment card records in his possession. But wait there is more…between 2012 and 1014 Markuta had attacked a video game reseller and SMS messaging service. He actually was sentenced to 11 years pleading guilty to 8 counts of hacking and fraud but the sentences will run concurrently, leaving him locked up for only two years!

Time for a little editorial comment…So, look. Cyber crime is no joke. It hurts real people and causes severe financial distress for victims. Global losses are estimated to be in the Billions of dollars annually. It is also difficult to track, arrest and prosecute perpetrators. Cyber theft of payment cards and personal information should be treated just like bank robbery or any other high crime. Ransomware hackers who disable systems and hold the encryption key for ransom, should be tracked down and treated like any extortionist. Phishers, whalers and other criminals with cute cyber names should be gives stiff sentences with little leniency. What about an international treaty that requires a minimum sentence of 20 years prison time and no cell phone or tech access? It seems that international cooperation and internet crime legislation have not yet caught up to the cyber world. Hopefully, that will change soon.

Protection
Until our lawmakers, judges and leaders catch up with the connected world, all we can do is to be careful, aware and protected. I had just read a report from a company called mimecast that offers some sage tips to help protect against whaling, a cyber crime where the perpetrator sends an email pretending to be a high level company official asking a subordinate to send money. For example, a US networking company called Ubiquiti was victimized to the tune of $46 million dollars in 2015 by a whaling attack. Here are some anti-whaling ideas:

  • Educate senior management and finance teams about this type of attack so they can be aware of the whaling tactics.
  • Carry out tests within your organization to gauge staff vulnerability.
  • Consider technology that alerts users when an email is coming from outside the corporate network.
  • Subscribe to domain name registration so that you will be alerted to domains that look like or are similar to yours.
  • Review financial practices. Insist that multiple signatures and requisition review be done prior to any large fund distribution.

Cyber crime is one of the fastest growing businesses on the global landscape. Law enforcement and the legislators are struggling to catch up with the new and evolving types and styles of cyber theft and extortion. Until that happens, it is up to individuals and companies to read, learn and be aware of potential threats coming at you in cyber space.


Posted: 29/12/2016 22:53:37 by Network Critical with 0 comments