What Can Insurance Agents Do About Cyber Crime?

“Obviously crime pays, or there’d be no crime.” ~ G. Gordon Liddy – jailed for his role in Watergate

Online crime is where it’s at for criminals, says Special Agent Corey Collins with the FBI’s Cyber Crimes Task Force in Columbus, Ohio. “Crime has moved online. It’s easier, cheaper, safer, and if caught the penalties aren’t too bad! For example, walk into a bank with a gun and get away with the average heist (approx. $2,000) = minimum 7 years in jail. Steal $250,000 online from the same bank. First offense = 6 months in jail”!

Commercial crime exposures for businesses are growing faster than traditional crime policies can respond. Phishing, spoofing, extortion, malicious employee conduct or theft, lost or leaked credentials, telephone hacking, and reliance upon a service, all may present an economic loss not covered by crime or other traditional P&C insurances. There’s an important role for Agents here, identifying, mitigating and transferring these serious business exposures.

Many cyber insurance policies do address forms of crime, after all, it’s typically malware infecting systems that permit data breaches, and it is a Federal crime to use a malware virus with the intention of harming a computer without authorization. However, other direct losses such as funds stolen with compromised passwords, extortion to restore your network or services it relies upon are clearly crime exposures not covered by ISO based crime forms, even the new ones!

Another tech enabled crime is fraud by credit card, read this blog article by Chris Christian, U.S. Risk. She poses an interesting question as to whether certain types of credit card fraud are insurable. After all, cyber policies are insuring other forms of fraud.

For insights about the information, criminals are targeting from us, read this article.

Obviously we’re all destined to trade even more via the internet, whether it’s direct buying online or just using a credit card, and of course, it’s inevitable criminals will always be around so long as crime pays (G. Gordon Liddy still has a career!). Becoming cyber vigilant and educating commercial customers about their cyber risks is a new and vital role for Insurance Agents. As scores of cyber security experts and pundits have said, it’s not a question of whether you will be a victim of a cyber loss, it’s just a matter of when!

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