By Steve Brooks
President
B&B Premier Insurance
Solutions Inc.
A Growing Threat
Safeguard your clients and your company against cybercrime
If you’ve ever been the victim of identity theft or even a stolen credit card, you know how much of a hassle it can be to fix the ensuing mess.
From unauthorized charges to bank
accounts being drained, at best the
experience is a time-consuming inconvenience and at worst, the ordeal can
take months to resolve.
Now imagine the fallout that would
occur if your clients’ private information was stolen by a cybercriminal. The
databases of mortgage brokers and
bankers often include sensitive information for hundreds if not thousands
of contacts, all of which could be compromised electronically. In a worst-case
scenario, not only would your clients be
faced with fraudulent charges — you
may be financially accountable for their
losses, as well.
Cybercrime is becoming increasingly
common, and thieves’ techniques are
constantly evolving in order to evade
the ever-changing security measures
of large banks and financial institutions. One of the ways that cybercriminals are evolving simply has to do with
their targets: More and more hackers
are switching their focus from large
companies to those with fewer than
100 employees. Moreover, cybercriminals are expanding in terms of the
type of information they steal; in addition to credit card numbers, volumes
of personal information are now more
frequently stolen.
Top-tier security programs can be
very expensive, making them unafford-able to small brokerages or even mid-sized banking affiliates. Even if your
company can’t afford the latest and
greatest in security software, your organization can still take certain measures to protect itself in the event that
it falls victim to a cybercriminal.
Cyber liability insurance, for instance, can provide a degree of security in and of itself. This type of insurance is growing in popularity despite
its relatively recent emergence in the
market. Standard business insurance
doesn’t typically cover cybercrime, so
this add-on can help protect you from
being held financially responsible for
the losses that others may suffer as a
result of a data breach.
If your brokerage or bank is considering investing in cyber liability insurance — or for that matter, if your company is concerned about cybercrime
— here are four topics that you should
keep in mind.
professionals already are understandably cautious when sending e-mails
and links to their clients and referral
partners, but even with due diligence,
you can inadvertently distribute a
virus that renders you liable for related
damages.
For instance, if you unknowingly
send a virus that’s attached to an
e-mail, you could be held accountable
for the recipients’ loss of productivity
and resulting financial losses. Specific
cyber liability policies can protect your
business from this financial pitfall.
3. protect your laptops
Be sure to remind yourself and your employees that a laptop is a major liability. The more laptops your organization
has, the greater the odds that one will
be taken from a car, a coffee shop or
any number of other places. Therefore,
your laptop and your colleagues’ laptops need to be protected at all times.
Consider enforcing laptop-use rules
for yourself, your processors and your
support staff. In the case of a stolen
laptop, it may only take moments for
a hacker to access your company’s entire server, all before you can even report the loss of the computer to your
insurance company. Make sure that
all employees are clear about proper
storage, transportation and use of laptops containing any sensitive information, thus avoiding disastrous financial
consequences.
prevalence of security measures that
already may be in place. Oftentimes,
however, this type of additional coverage can be purchased for as little as
$1,500 per year.
• • •
When it comes to cyber liability insur-
ance, brokers and originators should
be sure to conduct their due diligence
in speaking with an insurance broker to
determine the policies that best fit their
needs, budget, client base and security
concerns. although no one is eager to
spend additional money during these
difficult days in the mortgage industry,
brokers and originators need to remem-
ber that their clients are depending on
them to help with the largest financial
investment of their lives — and to keep
that investment safe and secure. •
1. common viruses can hurt
a virus can cost you more than just
personal aggravation. Most mortgage
2. look for coverage
If you’re concerned about cybercrime,
be sure to check whether or not your
current business insurance protects
you against such events. Some carriers don’t cover data and technology
risks under their insurance — a fact
that may not be clearly delineated in
their policies. This, in turn, may lead
you to think that you’re protected,
when in reality, you and your company
are still liable.
Generally speaking, unless cybercrime protection is explicitly stated
in your policy, it’s safe to assume that
you’re being left liable. By extension,
you also may assume that the cost
of defense against related lawsuits
against you also will not be covered by
your business insurance.
4. cost
Finally, if you or your company is interested in cyber liability insurance, you
should know that the price of this add-on is typically contingent upon both the
number of employees in your business
and the level of risk to which your company is exposed.
That level of risk can be determined
by factors such as the security of your
business servers, the accessibility of
sensitive client information and the
Steve Brooks is president of B&B premier
Insurance Solutions Inc., an independent
insurance agency in Southern California.
B&B provides property and casualty coverage, including: personal insurance (auto,
home, earthquake and umbrella coverage
for jewelry, collectibles and artwork), as well
as commercial insurance (general liability,
workers compensation). Brooks is also one
of the nation’s most recognized independent
insurance agents and regularly contributes
to national and regional publications.
reach him at (818) 223-8383, ext. 212, or
steveb@bpremierins.com.
