In today’s digital landscape, businesses increasingly rely on technology to streamline operations, manage data, and connect with clients. However, this digital transformation also exposes businesses to cyber threats, making cybersecurity a critical aspect of risk management. Three clients in the construction industry experienced firsthand the importance of cybersecurity and how it could have saved time, prevented headaches from cyber threats, and avoided thousands in fraudulent payments.
A $40 million-a-year construction company faced a fraud incident resulting in losses totaling $200,000. Despite security measures, two payment requests for identical amounts bypassed their defenses over one month. While the initial payment was successful, the company's cyber liability policy facilitated the interception of the second payment by their bank. Consequently, after filing a claim, the company recovered $200,000.
Another construction client encountered ransomware, with hijackers demanding an escalating payment to restore their systems. Despite seeking help from the FBI, the company was advised to pay the hijackers. After paying $7,400 in Bitcoin, the company faced challenges restoring their system. This client could not make a claim to recover their losses. Had they carried cyber liability insurance, the carrier could have assisted at every stage of the investigation and developed a breach response, including legal services, computer forensic services, notifications, credit monitoring, and public relations. Since this event, they have acquired a cyber liability policy to protect their business in case of another attack.
A $30 million construction client experienced a hacking incident, revealing their system had not been backed up for 60 days. Initially viewed as an internal matter, an IT investigation uncovered the oversight, highlighting a lapse in system backups for two months. Consequently, the company faced the daunting task of a complete system reset, incurring costs exceeding $300,000 to restore operations. Despite previously declining a cyber liability insurance policy, the company has since acquired one.
These clients emphasize the critical importance of considering cyber security insurance in the face of evolving digital threats. However, to truly safeguard your business, a proactive cyber risk strategy is essential. We recommend building an internal response team, conducting periodic incident response drills, and establishing relationships with external experts such as legal counsel, forensic investigators, or PR firms. Employee training, data mapping, staying informed about current threats, implementing multi-factor authentication, and securing wire transfers with verbal confirmation further fortify your defenses.
Proactively safeguarding against cyber risks is not just a good business practice but an essential component of risk management. At Hotchkiss Insurance, we redefine cyber liability coverage by offering comprehensive support and services, going beyond mere policy sales to become your trusted partner in risk management. Contact an agent today to discover practices and policies that can strengthen your business against unforeseen cyber challenges.