Hey, it’s Jeremy from Ochsner Insurance, and welcome to Cyber Monday. Today, we’re combining our insights from the restaurant and retail sectors to bring you three scenarios of cyber-attacks that could impact your business. These stories are real, and they happen more often than you might think. So, let’s dive in.
Why Broad Form Cyber Insurance?
First, let’s understand the difference between a Business Owner’s Policy (BOP) add-on for cyber coverage and a broad form cyber insurance policy. We always recommend broad form cyber insurance because it offers comprehensive coverage. BOP add-ons typically only cover data breaches and have small sublimits. They don’t cover threats like ransomware, social engineering, invoice manipulation, crypto hacking, or telephone jacking.
Scenario 1: Ransomware Attack on an Online Retailer
Imagine an online retailer like Kuiu, Transparent Labs, Three Nails, Born Primitive, or even Drake Waterfowl. One day, their network is locked down by widespread encryption with a ransom demand of $3 million. The business is shut down. They can’t process orders, manage inventory, or ship products.
What to Do? With a broad form cyber policy and good IT infrastructure, you can work with experts to decide whether to settle the ransom. Does your policy require you to pay the ransom first and get reimbursed, or does it cover the payment upfront? This is critical. Without coverage, handling a $3 million ransom could be impossible. Work with the insurance and IT to rectify the situation the most expeditiously. Be careful of handling ransomware on your own. What if you pay the ransom to a know terrorist organization and the FBI or Homeland Security comes knocking at your door? One of the benefits of working with an excellent cyber insurance company is their vase knowledge of the hackers and the terrorist groups. Don’t leave this one to chance your business and freedom could be at risk!
Scenario 2: Business Email Compromise (BEC) in a Wholesale Grocery
Now, consider a wholesale grocery. Their email system gets compromised, and fraudulent wire instructions are sent out to customers. One of their clients pays a $30,000 invoice to the wrong account. The money is gone, and there’s no FDIC insurance to cover the loss.
What to Do? Work with your IT and cyber insurance providers to solve the problem. A broad form cyber insurance policy will have these types of coverages to cover the loss and the cost of investigating the Business Email Compromise (BEC).
Scenario 3: Social Engineering in a Restaurant
An inventory clerk at a large restaurant receives an email that appears to be from their top supplier, indicating that the bank account information has changed. The employee pays a $25,000 invoice, only to later find out it was a scam. There’s no FDIC coverage for this type of fraud.
What to Do? Enhance your processes to prevent this type of fraud in the future. Ensure that any changes in payment details are verified through a secondary, secure method. Having a broad form cyber insurance policy may afford some coverage for this act vs an add-on to a BOP or Commercial Package.
Key Takeaways
- Business Continuity Plan
- Have a robust plan to keep your business running in case of a cyber-attack. Regularly test your backups and recovery procedures.
- Strong Cybersecurity and IT Infrastructure
- Work with your IT team or managed services provider to maintain a secure environment. Implement early detection and response systems.
- Broad Form Cyber Insurance Policy
- Ensure your policy covers all potential cyber threats and offers sufficient limits. The average total claim amount is around $4 million. Make sure you have enough coverage.
Conclusion
If you’re a restaurant or an online retailer and you’re not sure about your cyber insurance coverage, talk to your independent agent today. Review your limits and ensure you have a broad form cyber insurance policy. If you’re unsure or need help, you can always call us at Ochsner Insurance, 775-657-6050. We do this all the time, and we’re happy to assist.
We hope this has been helpful, providing you with valuable insights and scenarios that might affect your retail or online business. Here’s to your success and being more cyber secure. Have an amazing day!
Jeremy Ochsner
Ochsner Insurance
Feel free to reach out if you have any questions or need further assistance with your cybersecurity needs. Stay informed, stay protected, and let’s make your business more cyber secure.