Cyber Fraud

Businessman hand press telephone web button iconCyber-attacks are occurring exponentially more frequently. Not only have the high-profile attacks been focused on major corporations, which are widespread news events, but the volume of small business attacks have increased and lead the volume of attacks, by a large margin. Cyber Risk “stand-alone” insurance premiums in 2015 are projected at $2.5 Billion and are expected to triple to $7.5 billion in five years.

See also: What is Cyber Fraud? 

The number of Cyber files at HSNO has increased by 425% in 2015 over last year. Per a 2014 NETDILIGENCE study of 111 Cyber claims the average payout was $733,109 per claim. The average for large company claims was $2.9 million and $1.3 million for the Health Sector. The average cost for crisis service was $366,484. The average cost per record was $956.21. Including the small business arena, NPR reported the FBI’s findings that over 8,000 businesses were victims of Cyber crimes in losses totaling close to $800 million dollars.

See also: What is Cyber Loss? 

Hackers were the most frequent cause of loss (30%) followed by staff mistakes of (22%). Other categories of loss over 10% include virus, lost computer, rogue employee and paper records. The result is increased insurance claims and litigations. Based on studies at or near 100% of the current Cyber Liability policies include business interruption coverage. HSNO is experienced and skilled in measuring Cyber losses, Business Interruption losses and Litigation Support.

HSNO Analysis, depending on the coverage, size of loss and case will include:

  • Frequent and timely communication with the insured and insurer.
  • Identifying and classifying expenses related to the attack. This will include identifying and segregating system improvements. A Breach occurs and the insured will almost exclusively make system improvements.
  • Detailed review of BI losses, for retailers will include a thorough analysis of sales losses online and at the brick and mortar stores.
  • Analyzing industry data including competitor’s sales history and potential increases due to the breach to assist in determining impact of the breach
  • Buyer’s patterns and industry statistics.
  • Analyzing both macroeconomic and microeconomic factors and how it impacts the company.
  • Google Analytics.
  • Examining non-breach events and industry conditions that may have affected sales during the period of indemnification.

HSNO is out in front of the Cyber Liability and First Party growth. We are requested speakers for Cyber losses at industry conferences. We have the skills, knowledge and experience to assist you with your Cyber loss measurements.

Ydstie, John. “When Cyber Fraud Hits Business, Banks May Not Offer Protection.” NPR. National Public Radio, 15 September 2015. 15 September 2015. http://www.npr.org/sections/alltechconsidered/2015/09/15/440252972/when-cyber-fraud-hits-businesses-banks-may-not-offer-protection