2021 is now in the rearview mirror. COVID has created challenges for businesses. As the world isolated much of our economy and workforce went virtual. Bad actors, known as “hackers”, saw opportunities in our rapidly expanded remote business environment. An October report by AON identified cyberattacks and data breaches as the No. 1 global threat to businesses.
Cyber threats have increased the risk for law firms as small businesses have become more dependant upon technology. According to an October 2021 report, cyber intrusion attacks have jumped 125% year over year. Ransomware and denial of service attacks are driving first-party coverage losses, with an average down time of 23 days and an average cost of $1.85 million according to the same report.
Ransomware attacks happen when a “hacker” uses “phishing” to trick someone in an organization into clicking on a link or downloading a file that then installs a virus on their computer. The malware then spreads to any connected networks. The hacker then makes a demand (ransom) asking for payment to decrypt the files. Even if the ransom is paid, statistics show that on average 10% of the data is not recoverable.
Protecting your passwords is the first line of defense against a hacker. Privilege abuse was involved in 80% of breaches. Hackers have a myriad of ways of stealing passwords. Once they have a password it’s difficult to detect the bad actors when they’re using legitimate credentials. Once they’re in, installing a keylogger is easy, and the hacker will have every keystroke you create during the workday. Many risk managers are now recommending the use of Multi-factor authentication, or MFA. An MFA is a security mechanism that requires an individual to provide 2 or more credentials to authenticate their identity.
Underwriters are reacting by reducing capacity on first-party coverage. The 2021 fourth quarter renewal cycle has seen drastic rate increases while at the same time reducing first-party coverage limits. This means customers are paying more for less. As the international crisis heats up in Europe, 2022 promises to bring more of the same.
If clients haven’t implemented MFA inside their email, workstations and other critical software systems they should do so immediately. Underwriters are requiring MFA more and more.
In the expanding world of technology, the need for and importance of cyber insurance grows exponentially. For law firms, a cyber incident can lead to a loss of business, reputational damages, regulatory penalties and lawsuits. The cyber insurance market is changing. However, the cost for a dependable cyber insurance policy is not prohibitive. Pricing for most solo attorneys is under $1,000, for the lowest policy limits. Contact Kaestner & Berry for more information on how to protect your business in the event of a cyber attack.