The Cyber Crook

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Most people think of insurance as a mechanism to insure things such as a house, car, jewelry, boats and other tangible items. Now that the Internet is entrenched in the way we do business there is a new exposure that is just as real-cyber crime.

There have been more and more instances where a hacker has been able to infiltrate not only personal databases but commercial ones as well where information is not only stolen but also utilized to cause further financial damage to the victim. The most frightening scenario is where the hacker thief accesses the banking information of the unsuspecting person or business and arranges a money transfer to an unknown account. The bank will honor the instructions since it appears to come from the depositor. The bank may not take responsibility for the fraudulent transaction since it came from your Internet site and therefore it is not considered a bank error.

Fortunately there are insurance policies that will reimburse for a fraudulent money transfer as well as protect for other first party losses such as a virus which may wipe out an entire database.

In addition, insurance is available for third party cyber liability where a business may inadvertently disclose confidential client information such as social security numbers or credit card data or introduce a virus to another entity.

There are many scenarios of potential cyber crime. It is important for an individual or business to assess their exposure and utilize risk management techniques and/or insurance for protection.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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