“GONE PHISHING!” – The Real Liability of the Virtual World

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“GONE PHISHING!” – The Real Liability of the Virtual World

Phishing is a criminal practice that exploits individuals via fraudulent electronic communication and interaction.  Together with spear phishing, clone phishing and whaling, the Internet can be a scamming minefield.  If you don’t already, it might be a good time to pay attention to the security breaches you hear about in the news, like Gawker.com in 2010, Sony, Epsilon and others in 2011, and most recently Zappos in early 2012.

Generally speaking, social engineering is putting bait on a virtual fishing pole, casting it out into the vast ocean of the Internet, and waiting to see who might naively take a bite. After being hooked by the apparently trustworthy communication, the unknowing target then proceeds to give up confidential information (social security number, credit card number, etc.) – anything that can help perpetrate identity (ID)  theft or credit card fraud.  In other cases, the scammer can even get cash from his hooked ‘phish’ by sending emails from a hijacked email account posing as a friend in need.  It’s been estimated that scammers can make $500 a day from their victims, if not more.

Businesses of all sizes are subject to security breaches. It can be because their networks were compromised, an employee lost a laptop or perhaps there was an accidental disclosure of confidential information (like posting a spreadsheet of client data to a public website). When this type of breach happens, and it does often, the business can be liable for a host of breach-related costs. To mitigate the consequences, the negligent company must bear the responsibility to:

  • Notify customers their data has been disclosed,
  • Incur information technology (IT) forensics costs to investigate what caused the breach,
  • Be subject to privacy regulatory activity, and/or
  • Third-party liability from those who were caused financial harm from the breach.

The liability does not stop at the business that lost customer data; it extends to that company’s subcontractors, independent contractors and vendors who may be the linchpin in the breach.  When contracting with business clients, a subcontractor may take on its client’s highly sensitive customer information and therefore is also responsibile for maintaining its security.

Let’s consider what happened to Epsilon in April 2011.  Epsilon is one of the largest email and online marketing firms, whose customers includes seven of the Fortune 10 amongst its 2,500 clients.  Their breach exposed the names and email addresses of massive customers like Best Buy, Citibank, and Walgreens.  While it may not seem like highly prized data in and of itself, names and email addresses are quality bait and useful in constructing a successful scam.  Receiving a personalized message from a company that you already have an account with can be convincing and leaves many people susceptible to ID theft.

Whether you’re a big vendor like Epsilon, who performs email marketing services for huge Fortune 500 clients or an independent contractor working on your personal laptop with your client’s confidential data, you can become liable for a security breach of your customer’s (or your customer’s customers’) data if you or your equipment is somehow the weak link.  The general consensus from the privacy/security community is not whether someone will be hacked, but when.  After that happens, it’s about what was done to mitigate the loss.  In a recent study entitled “Empirical Analysis of Data Breach Litigation,”[1] law researchers at Carnegie Mellon and Temple University found that a company that offered credit monitoring after a breach was six times less likely to get sued.  If it’s not preventable, then why not at least transfer and minimize the risk and cost.  Having a strong service contract that protects your position in the event of a security breach is one way to start, along with maintaining industry standard privacy and security controls.  One cost-effective way to transfer the risk of this liability is through Cyber Insurance.

Cyber Insurance combines Technology Professional Liability (a.k.a. Errors & Omissions), Miscellaneous Professional Liability, Privacy Liability and Network Security Liability into one omnibus coverage that protects a company against today’s ever growing need to safeguard electronic information.  The coverage can help cover costs like Information Technology forensics, third-party liability, and credit monitoring.  The nuance of whether you’re subject to a third-party liability claim or first-party privacy cost claim can be avoided, when you have a policy that covers you from all angles.

One obvious lesson is to be very careful with all communications and actively protect your own confidential information and passwords.  If you’re not careful on a personal level, you may have your account hijacked and have to deal with your email’s support team who may, or may not, be able to retrieve your emails from the last five years.  Not to mention the scorn of your friends and family who may have given up money or other confidential data to someone perpetrating a scam from Nigeria.  For a business, however, it’s critical to not be known as the company that let down its guard and made its customer’s data vulnerable to the scores of hackers, scammers, and organized e-crime syndicates that are on the prowl.

As you explore and utilize the wonderful World Wide Web, enjoy surfing, but don’t get hooked!

BizInsure Guest Blogger: Natalie Chin


[1] Romanosky, Sasha, Hoffman, David A. and Acquisti, Alessandro, “Empirical Analysis of Data Breach Litigation” (February 19, 2012). Available at SSRN: http://ssrn.com/abstract=1986461 or http://dx.doi.org/10.2139/ssrn.1986461

 

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Jugrid Ombisi
Jugrid Ombisi
16:26 15 Jun 21
Done in less than an hour!
William Opperman
William Opperman
00:30 02 Jun 21
Efficient, and great value. The agent was able to give us a quote and a new policy in a short period of time. Thank you
Brenda Jones
Brenda Jones
20:30 24 May 21
I had a great experiencing obtaining several of my insurance needs as a landscaping company here in Northern Colorado. BizInsure's team took care of my needs and was very responsive to help with paperwork needed to secure a potential client account!
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Arik Solberg
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Adj Ako
Adj Ako
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Very efficient they were able to help me out with my request promptly....highly recommend this companyI am very happy to have them
Elba Perez
Elba Perez
18:50 26 Apr 21
I need a help getting errors and omissions insurance along with general liability. Jose was very friendly informative and was very patient with me during the process. He found me some of the best rates for the coverage that I needed. Highly recommend
Casper Martinez
Casper Martinez
19:51 20 Apr 21
I had numerous conversations with several business insurance agents over a month's time. I also had several conversations confirming the policy inclusion/exclusions and asked many questions. My BizInsure agent was professional, knowledgeable and most important—detail oriented. Even after having an initial conversation a month earlier he knew and *remembered* all my personal/professional insurance needs. When I asked for additional information on the third call he was able to provide me with details very quickly. He was also VERY patient. That is a big plus in my opinion. It illustrated a high level of respect for my needs. I also found when I called back and asked to talk with the initial agent, the person who answered the call was able to get in contact quickly and my agent responded and returned the call within 5-10 minutes. The transaction was smooth, and I think it's a good sign should I ever need to make a claim. I highly recommend BizInsure.
Lori Public Artist
Lori Public Artist
21:00 07 Apr 21
Sandra Darjean-Murphy
Sandra Darjean-Murphy
17:48 31 Mar 21
Jusephine Ghong
Jusephine Ghong
17:58 23 Mar 21
The rep was extremely helpful actually lowered my quote and made sure I was covered to fit my needs with my growing business! 5star!!
Franklin Behm
Franklin Behm
19:04 16 Mar 21
Excellent service and prices.
Cassiopée V Lapierre
Cassiopée V Lapierre
23:13 09 Mar 21
S & S Professional care llc Home Health Agengy
S & S Professional care llc Home Health Agengy
04:15 24 Feb 21
Mr. Daniel Scott was very responsive to my professional needs.
Stephanie Woodruff
Stephanie Woodruff
17:38 18 Feb 21
Eugene deserves a raise! First time purchasing insurance and he made the process so simple for me. His patience and attention to detail left me feeling confident in my decision to choose BizInsure. Gracias Eugene!
Esined Perez
Esined Perez
23:32 17 Feb 21
DIVINE FIJIANS HOME CARE SERVICES
DIVINE FIJIANS HOME CARE SERVICES
22:49 05 Jan 21
The customer service provided by Jose was outstanding. He explained everything in a very clear/logical way and answered all of my questions. After providing all the information to obtain general liability insurance, Jose sent me the declaration page of the insurance for review. All of the information matched what I provided over the phone and there were no typos. The next day I called back to purchase the insurance which was easy and fast. Overall, my experience with BizInsure including the customer service by Jose exceeded my expectations.
Joe Wajdula
Joe Wajdula
03:29 12 Dec 20
Hiscox/BizInsure made getting Liability Insurance very easy and reasonable.I expected it to be a long and complicated process and it was a nice surprise that they made it so uncomplicated. Thank you. Lisa
Lisa Word
Lisa Word
21:51 24 Nov 20
Eugene was incredible. I called 4 other brokers before him who were impossible to get any help.
rhonda hale
rhonda hale
23:26 12 Nov 20
Owner (LPN)
Owner (LPN)
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Cincere Browdy
Cincere Browdy
15:16 29 Oct 20
Very quick to get in touch with you and good with follow up. Had some trouble retrieving my quote to log into my account initially but Daniel assisted me and the changes were made to get me into my account. Great value for the money.
Fran Sutton
Fran Sutton
16:34 20 Sep 20
Very happy to be insured with this company. Professional, Timely, very helpful. Thank you Juan, you made it so much easier for me to understand.
Aileen Day
Aileen Day
19:55 15 Sep 20
This company responded when I needed them to respond while facing a deadline. They are an excellent choice for business Insurance.
Michele Harris
Michele Harris
01:52 12 Sep 20
Jose Quintero took such great care of me and was very patient explained everything I did not understand and got me set up quickly. Fabulous customer service
Christina Rose
Christina Rose
02:41 27 Aug 20
I can't say enough good things about Daniel Santos kind and effective communication skills as an insurance agent. Daniel was so pleasant, friendly and efficient with helping me obtain insurance as a teacher. If I were to give Daniel a grade, he has earned an At . He made the process easy to understand, it was far easier than what I anticipated. Nancy S.
Nancy Sloan
Nancy Sloan
00:47 26 Aug 20
I was in need of professional liability insurance for my sole proprietorship. A friend referred me. Everythng was quick and simple and AFFORDABLE!
hope jones
hope jones
20:31 25 Aug 20
If you need Private Home Care Provider insurance for your company, BizInsure, LLC can get it for you!
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Pamela Curry
16:45 24 Aug 20
Cameron Peek
Cameron Peek
19:25 24 Jul 20
Great and fast service!!!! The representative was very professional!!!!
Tanya Sweet
Tanya Sweet
19:51 14 Jul 20
I was tryi9ng to find commercial liability insurance for my new comp-any and BizInsure was easy to use and very affordable which is great for me as a new business.
Jimmy Smith
Jimmy Smith
19:01 14 Jul 20
Great service, but they're also extremely patient. I called over a month ago for specialized E & O coverage, and Bizinsure was able to put me in touch with an extremely reasonable quote. Absolutely invaluable time and monetary savings to be had by going through these folks. If you can-- ask for Anthony. Absolute gem of a human.
James Lang
James Lang
18:19 02 Jul 20
Ken M
Ken M
23:21 28 Jun 20
Great service insurance prices are great for professionals looking to get insurance for businesses....
Rhonda Gray
Rhonda Gray
22:34 22 Jun 20
The provided very professional service and made the process easy.
Paul Rising
Paul Rising
21:51 04 Jun 20
Bradley Hoyle from the Biz Insure team was excellent to work with. Everything was quick and smooth. Great service, much appreciated!
Kristene Smith
Kristene Smith
02:03 04 Jun 20
Anthony Spencer was great!! Very quick response time!! He was very Professional! I would suggest him because he helped me find a affordable rate and explained all the technicalities..
Fre Hall
Fre Hall
16:38 28 May 20
I was referred to Bizinsure by a industry trade group that I am a member of. It was easy to get a quote online and then received excellent customer service from Bradley H. to complete my policy purchase over the phone. I have shared this company information now with other business owners for their policy needs.
Dawn Torres-Gale
Dawn Torres-Gale
22:11 08 May 20
This company was very precise with explaining services and made sure I chose the right business insurance coverage, great customer service at purchasing.
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Nekeisha B.
01:30 05 May 20
Amazing
Jasmine Q
Jasmine Q
14:31 02 Dec 19
Trish is the most patient, professional and understanding insurance agent I’ve ever worked with. Trish has taken care of all my business insurance needs for the last couple years. I am really happy that I found an insurance agent that I know will take care of me & all of my concerns. I feel like a valued customer & I appreciate the great customer service that I get every time!!THANK YOU!
Dr. Youssef C. Atallah
Dr. Youssef C. Atallah
17:21 14 Nov 18
Tricia helped me get insurance for my business. The task of obtaining a quote was really starting to frustrate me until I was referred to BizInsure through a different agency. Tricia got me a quote fast, and even took a down payment over the phone and issued the proof of insurance the same day. a+ service, would do it again in a heartbeat!! Thank you!!
Josh Mariscal
Josh Mariscal
18:07 22 Jun 18
BizInsure was a great find! I did not have to fill out applications, and Tricia was able to quote and bind business insurance for me within half an hour.
Allison Young
Allison Young
17:28 21 Jun 18
Started doing business again and needed a policy fast. Ramez was reasonable, helpful and the rates are OK. Buyer beware? Sure, for me it turned out OK this time. Worth a call.
Mark Wallace
Mark Wallace
23:42 13 Nov 17
Daniel Scott
Daniel Scott
15:15 27 Jun 17
Great customer service. I've been very inpressed with my dedicated representative that had helped me navegate my insurence needs. Thanks so much!
Graham Blair
Graham Blair
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