What a remarkable year 2020 has been. COVID-19. Natural disasters from coast to coast. Widespread social unrest not seen in decades. A power struggle for the ages in Washington. The difficulties facing many businesses this year are unprecedented as well. Some businesses are struggling to keep their doors open in communities where people have stayed home for various reasons. Other businesses are not permitted to open at all, given the orders handed down by their respective cities or states. For all businesses, a threat that has been lurking and out of sight for years is breaching the surface in 2020 in astonishing fashion—cyber attacks.
The leading types of cyber attacks in 2020 are Ransomware, Funds Transfer Loss, and Business Email Compromise, making up about 84% of all attacks. The increase in 2020 over 2019 ranges from 45-70% for these particular types of attacks. Their origins range from the introverted kid in his parent's basement to organized capitalistic gangs, to terrorist groups that are state sponsored, such as North Korea and Russia, interested in destabilizing our country. New individuals joining the cyber attack world is undoubtedly contributed to by the desperate situations they might be in to generate ways to make a living. Other motivations could be anger towards particular companies or governments, or maybe they just like the power they wield and the destruction they can cause. Regardless of why there might be an increased interest in joining this illegitimate industry, there is no denying that cyber claims are on the uptick in 2020.
At The Harry A. Koch Company, our clients are unfortunately not exempt from this criminal enterprise. In 2020, we have had five times more cyber claims recorded than in the entire years of 2018 and 2019, and there are still two months to go. Those attacked include medical centers in large cities and quaint towns; modest local family owned businesses and enormous companies with a significant Midwest presence; school districts and municipalities; non-profit organizations and for-profit companies with tens of millions in revenue. There is no discrimination in the cyber world. If they can get through your door, they will let themselves in.
Fortunately, for our clients, many have had cyber policies in place for these claims. Policies can provide a range of coverages, including business income loss, ransom payments, costs to replace/restore electronic data, notification costs to parties who may have had their information compromised, and many other additional options. Also, the guidance and assistance from IT and cyber legal experts that come with a policy has provided great relief to our clients in their time of need. For those of us old enough (like me), a great source of stress might be losing your electricity in a storm and not being able to watch TV. The modern-day equivalent of this is losing the controls or access to computers and smartphones. Unfortunately, the anxiety I have seen on cyber claims is exponentially worse than being unable to watch Happy Days or MTV, and the impact can be financially devastating.
The data does not lie. Cyber attacks are on the rise, and the potential targets are anyone who owns a computer. We recommend becoming fully informed about your IT setup and safeguards. Then, implement ways to prevent cyber attacks such as:
- Train employees in cybersecurity principles.
- Install, use, and regularly update antivirus and antispyware software on every computer used in your business.
- Use a firewall for your Internet connection.
- Download and install software updates for your operating systems and applications as they become available.
- Make backup copies of essential business data and information.
- Control physical access to your computers and network components.
- Secure your Wi-Fi networks. If you have a Wi-Fi network for your workplace, make sure it is secure and hidden.
- Require individual user accounts for each employee.
- Limit employee access to data and information and limit the authority to install software.
- Regularly change passwords and implement multi-factor authentication.
We're here for you. If cyber insurance will give you the peace of mind and protection you are looking for, please contact us to learn more about your options.
Jim Glendening is the Claims Manager at The Harry A. Koch Co. He is responsible for overseeing the claims team, who is dedicated to advocating for our clients in all aspects of the claims arena.