Greetings everybody. My name is Mike Stromsoe. I’m the President and one of the team leaders at Stromsoe Insurance Agency. And I am uber pumped and excited today in our ongoing series to better protect business owners and everything that they face out there in running their business. And we have something that has become a very big risk very quickly in today’s environment. So I am proud to have with us today, Mr. Michael Armstrong. He’s one of our business partners and I don’t know of anybody that has more knowledge and a better product out there to better protect business owners and their risks against cyber liability.
Here’s just a few key points that we touched on, watch the full interview above for all of the information to protect you and your business:
Why insurance? Why cyber insurance?
Let’s talk about businesses and their vulnerability to cyber attacks in today’s marketplace. I mean, who’s vulnerable out there?
Every single business is vulnerable to a cyber attack. When you’re looking at some of the largest top cyber attack breaches, the familiar names of Target, Facebook, Google, Marriott, some of the largest corporations within the US have also suffered some of the largest cyber attacks. And these are companies that invest millions of dollars into cyber security and the procedures implemented to mitigate those losses. So with that being said, as a small to midsize business owner, the vulnerability is there for too, and the exposure is there.
There are four things I really look at:
- Businesses that collect sensitive data (clients, employees, customers, whoever it may be).
They are collecting the name, address, phone number, banking, information, etc.
- Every business is performing financial transactions.
It’s essential to their growth and it helps a flourishing economy, which is something we all want and love to see. So that brings me to a certain point. And this is a strong claim and exposure we see in our industry, which is called a fund transfer fraud, also known as social engineering. This is the second most common claim we handle. And so with that being said, what that entails is, simply put, a hacker is able to socially engineer or dupe an employee or senior level executive officer into sending money to the wrong place.
What businesses need to understand is that there’s two pieces of information that hackers need to carry out this sort of attack. It’s business email and bank account, which every business, if not most, have. And that already makes them exposed to one of the most common claims we handle.
- Businesses are relying on technology, now more than ever.
So in 2016, Microsoft released an annual report with the prediction that by 2020, there’ll be four billion active internet users. Right now there’s about 4.4 to 4.5 billion, which is close to 60% of our total population. So in 2019, most recently, they reported by 2030, there’ll be 50 billion connected devices on the internet.
What does this mean to us? Well, this means that with the more and more connected devices, there’s going to be a higher volume of data being transferred back and forth. So the exposure and the challenge of protecting businesses from targeted attacks is going to be very difficult at this day and age.
- The human error aspect.
Human error is arguably the number one cause of any cyber-attack that we handle. And so as a business owner, you need to consider, truly consider, are my employees taking the safest measures? Do we have the best practices and procedures in place?
Two exposure brackets:
First party costs are as a business we’ve been hacked that’s notification costs, identity theft, monitoring services, cyber crime business or interruption, and so forth. So based on our analysis and our data, close to 96% of the claims we’ve handled are associated with first party costs. And this ties into the innovation factor that Evolve brings. We consider ourselves the pioneers of cyber product innovation. For our first party costs, there is no aggregate on the first party limit. So as a business owner, you ask yourself, how many transactions am I making a year? 50 to a 100. So then you take into effect that on each unrelated incident that could happen within that policy period, that’s reloading.
Third party costs. This is, as a business, we’re being sued as a result of a cyber attack. And that’s privacy liability or network liability. But those only account for close to 4% of the claims that we’re handling. So what businesses need to understand is our goal in handling these claims because they’re very specific on each individual case, but ultimately our goal is to get that business is back up and running as quickly as possible and in doing so handle them so effectively that we avoid those third party costs.
What type of increased exposures might employers be facing right now, especially with the remote working environment that we’re in right now?
With any business, one of the key aspects of running a successful business is to be able to adapt to the unpredictable and unprecedented situation. And this is one of those situations. And unfortunately in my field, these are the situations that hackers flourish on. They love to take advantage.
FBI reported on April 1, 2020, they issued a press release warning all businesses and individuals that cyber actors will be taking advantage of the situation due to the high volume of virtual networks and virtual environments. It doesn’t matter whether you’re the government, private sectors, private organizations, or individuals. And this is related to COVID-19 and employees and companies now having to work remote.
Before then, by March 30th, they had received and reviewed 1200 claims specifically directly related to COVID-19. So again, emphasizing the fact that this is a hacker’s paradise. This is what they prey on is that human vulnerability, that human error.
We’re passionate about cyber insurance and we’re just helping people with that fighting chance to save their businesses and everything they worked so hard for and everything that they built. So if you’re watching this and you have any questions about cyber insurance at all, we just want to help educate, we just want to help protect people, don’t hesitate to reach out and have a conversation with us.
Connect with us today:
“SIA has been our insurance partner of choice for more years than I can remember. They take care of everything – our business, rental properties and all of our personal policies. We have always been impressed with the level of customer service and they always go the extra mile to make sure we are well taken care of. The SIA team is always there when I need their assistance the most. Most importantly – we trust them!”
Stefani & James Laszko
Mythos Technology – Temecula, CA – Client Since 1999