Newly Evolving Risks in Crime Insurance

Newly Evolving Risks in Crime Insurance

Most business owners are aware of the threat of employee fraud and the need for carrying crime insurance protection. However, the threat of potential fraudulent activities is ever-evolving, thanks in large part to the digital world in which we now conduct the bulk of our business.

Scope of the Problem

According to the American Institute of CPAs the areas of cybercrime that most affect businesses fall under these five areas:

  1. Fraudulent Tax Refunds
  2. Corporate Account Takeover
  3. Identity Theft
  4. Theft of Sensitive Data
  5. Theft of Intellectual Property

According to the AICPA, small and mid-sized firms are usually targeted since they often do not have the same caliber of internal controls used by larger firms.

A new type of risk within this world of cybercrime is the social engineer, a glorified term for a con man who manipulates people to gain information to sensitive data. Examples of social engineering would include phishing emails or a person impersonating someone else within the organization in order to gain sensitive information.

Security Measures

In addition to carrying adequate amounts of crime insurance for your business and reviewing those limits on a periodic basis, the AISCPA recommends the following:

  • Implementing internal cybersecurity audits
  • Patching of any vulnerabilities
  • Using internal access controls to prevent internally generated crimes
  • Developing a system of monitoring to detect any breaches in a timely fashion
  • Having an Incident Response Plan

In a recent study undertaken by a corporation that had over 600 security breaches over a five year period, it was determined that fully 87% of those breaches could have been avoided if the proper controls had been in place at the time the breaches occurred. This is actually good news for those who implement adequate protections.

This post was written by , posted on September 10, 2015 Thursday at 1:45 pm