Cyber Incidents and Costs are Climbing

Every day we continue to read or hear news about the many data breaches and cyber incidents, including Sony, the U.S. government’s Office of Personnel Management, and several airlines. As reported in the 2014 FBI Internet Crime Report, there were 269,422 total complaints in 2014. Of those complaints, 123,684 reported a loss representing a total of $800,492,073.

The schemes are becoming more and more sophisticated.   One such Internet scam named the “Business Email Compromise” began in 2013 and targets businesses that regularly perform wire transfer payments. FBI statistics on BEC includes more than 7,000 U.S. companies that have been victimized—with total dollar losses exceeding $740 million on this one scheme alone.  According to IC3 (Internet Crime Complaint Center), since the beginning of 2015 there has been a 270 percent increase in identified BEC victims. Victim companies have come from all 50 U.S. states and nearly 80 countries abroad. The majority of the fraudulent transfers end up in Chinese banks.

Regardless of who is targeted, the cold hard truth is the scamming techniques are becoming harder to detect and therefore the numbers of incidents and the total dollars lost are climbing.

NetDiligence® 2015 Cyber Claim Study shows the top target business sectors still include Healthcare as the principal industry to be effected, followed by Financial Services, Retail , Technology and Professional Services. Below is a sample of the total payout amount of costs determined by their study of 112 claims representing a variety of industries.

Business Sector # of claims Min Median Mean Max
Healthcare 25 $2,598 $60,563 $1,325,777 $15,000,000
Financial Services 15 $0 $72,770 $141,249 $809,788
Retail 12 $91,359 $455,488 $1,795,266 $8,916,432
Technology 11 $0 $90,000 $206,532 $641,635
Professional Services 10 $6,704 $29,217 $329,845 $2,989,966
Hospitality 6 $30,000 $82,724 $195,447 $706,000
Restaurant 5 $4,000 $16,212 $75,744 $250,000
Non-Profit 5 $5,900 $35,794 $50,112 $101,127
Media 3 $6,000 $55,299 $68,596 $144,490
Manufacturing 2 $750 $65,967 $65,967 $131,184
Gaming & Casino 2 $80,000 $87,275 $87,275 $94,550
Entertainment 1 $73,968 $73,968 $73,968 $73,968
Other 15 $708 $61,339 $713,133 $6,700,142

Don’t get caught in this situation! Talk to one of our experienced licensed representatives at The Armstrong Company Insurance Consultants to assist with Cyber Liability Coverage. Contact us today! We are here to work for you!

The Armstrong Company Insurance Consultants  (License #0440075)

Posted on: December 2nd, 2015 at 10:34am by Armstrong. Filed under: Cyber Liability Insurance
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