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10 Tips for Securing Responsive Cyber Coverage

SAN DIEGO—With hacking incidents becoming all too common, risk managers are under increasing pressure to help protect their companies from the inevitable breach. Insurance is an option but policy forms are still developing. In a session at RIMS 2016, Joshua Gold, a shareholder with Anderson Kill and Debbie Gramer, director of global risk management at Arrow Electronics, Inc., offered the following 10 tips to risk mangers looking to secure the best possible coverage for their organizations.

  1. Be careful with insurance applications.
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    Use precise language to convey your exposures to underwriters. Never answer “yes” or “no” to a question that doesn’t really have a yes or no answer.

  2. Retro dates. Hackers can be in systems for days, months or even years so it is important push retro dates back as far as possible.
  3. Look for clear policy coverage. Forms and terms change over time as the risks shift. Having clear language can remove ambiguity.
  4. Symmetry with other insurance (e.g., CGL, property). Review existing policies to determine where there may or not be coverage gaps.
  5. Get endorsements of special coverage needs. If you have exposures from cloud providers and third-party vendors, for example, you will need to specifically address these. Exclusions matter.
  6. If you accept payment cards, be aware of PCI issues and card brand fines and penalties.
  7. Address sub-limit concerns. Losses can be expensive. Make sure sub-limits are adequate.
  8. Beware of breach of contract exclusions.
  9. Beware of conditions on “reasonable” cybersecurity measures. “Reasonable” is a  subjective term. Specifically define security measures to remove any grey areas that could lead to a coverage dispute.
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  10. Business interruption and reputational damage insurance may be vague but they are becoming more relevant. Business disruption is quickly becoming the most important operational consequence of a hacking incident.
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    Make sure you are protected.

RIMS Presents Risk Management Industry’s Top Honors

RIMS16_Award_Winners-7SAN DIEGO—During today’s RIMS 2016 Annual Conference & Exhibition Awards Luncheon, RIMS doled out its highest honors to several prominent members of the risk management industry.

The risk management society presented Christopher E. Mandel, senior vice president of strategic solutions at Sedgwick Claims Management, Inc., with its top honor, the Harry and Dorothy Goodell Award for outstanding service and achievement to the risk management discipline.

“The risk management community is filled with exceptional professionals but few have had the remarkable career achievements and broad industry impact as Chris Mandel,” said RIMS CEO Mary Roth. “To this day, Chris continues to give back to the profession through his involvement with RIMS and at Sedgwick. He is a wonderful example of the best this profession has to offer and it is our honor to present him with RIMS’ highest award.”

Mandel served as 2002 RIMS president, and has fulfilled 19 distinct roles for the society and delivered dozens of workshops for other risk professionals since becoming a RIMS workshop instructor 2010, with particular emphasis on enterprise risk management and strategic risk management.

This year’s Risk Management Hall of Fame inductees are David Mikulina and William H. (Bill) McGannon. Mikulina headed the risk management department at Hyatt Hotels Corporation for 23 years before his retirement in 2007, and still enjoys sharing his insights with rising and veteran risk management professionals alike as a longstanding RIMS member. McGannon was one of the first Canadian risk managers to establish a full-service risk management department that included loss prevention and statistical support at NOVA Chemical Corporation in Alberta. After his retirement in 1998, he frequently lectured at the University of Calgary and traveled to Scotland to participate in the Risk Manager in Residence program. While McGannon passed away in 2015, his legacy in the risk community lives on, particularly through the William H. McGannon Foundation, which provides scholarships, research grants and student involvement initiatives to advance risk management by way of education, research, mentorship and work experience programs.

“Although the risk management profession has evolved significantly, the achievements of its early pioneers continue to have lasting influence on the processes and strategies used today,” said RIMS Chief Executive Officer Mary Roth. “Whether it was enhancing their organization’s already complex risk program or devoting themselves to supporting the promising careers of future risk management leaders, this year’s Risk Management Hall of Fame inductees have unquestionably made substantial contributions to the profession and RIMS.”

“We are pleased to recognize Bill and Dave for significant achievement in their professional careers and their contributions to shaping the risk management discipline,” said Rob Schimek, CEO of AIG Commercial.

RIMS and Business Insurance presented Gus Fuldner, head of insurance for Uber Technologies, with the 2016 Risk Manager of the Year Award.

In recognition for her outstanding performance in furthering risk management with the RIMS Memphis Chapter, Sedgewick Senior Vice President of Risk Management Robin Joines received the Ron Judd “Heart of RIMS” Award.

RIMS also announced its first inductees into the RIMS Ambassador Group, which recognizes individuals for their continued service with the organization. Darius Delon, South Alberta Chapter member and associate vice president of risk services at Mount Royal Univeristy, and Daniel McGarvey, Western Carolina Chapter member and managing director at Marsh, both recived this award for going above and beyond to help strengthen and support the society’s strategic initiatives.

The RIMS Rising Star Award was presented to Alumine Bellone, director of risk and insurance for Broward Health, and Kathleen Crowe, account specialist II for Aon Risk Solutions were honored for demonstrating exceptional initiative, volunteerism, professional development, achievement, and leadership potential.

David Engel, director of risk management for AT&T, received the Cristy Award, presented to the individual with the highest marks on the three exams required to earn the Associate of Risk Management designation.

Phishing: Understanding Your Cyber Adversaries

Nearly two years ago, an infamous incident occurred where stolen pictures of celebrities flooded the internet. Originally, it was thought that this was due to an iCloud vulnerability that allowed a brute force attack. But it now turns out it was because of a simple social engineering phishing hack.

Phishing usually involves sending mass emails that masquerade as legitimate communications, coming from a trustworthy source like a big bank or credit card company. The phisher seeks to trick the recipient into clicking on a link or opening an attachment that downloads malware onto the victim’s computer. The malware can then be used for criminal activity including theft of sensitive data or money. While phishers may send thousands of emails, all they need are a few or even one individual to fall for their trick to get into the IT system. It’s easy to forget that security threats aren’t always the work of sophisticated technology geniuses with malevolent intent. As in the case of the celebrity photos, the method was relatively simple. However, it still caused reputational damage.

Cyber attacks don’t appear out of nowhere.

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At the beginning and right through development and attack, humans are involved. Recently, we profiled half a dozen types of attackers. We call them the “Unusual Suspects.” An attack might start with the Professional working in the digital shadows seeking to make the most money possible from the damage they cause. Then you’ve got the Mules and Getaways who are on the front line, and will be the first to get caught when the law comes knocking. There are also Activists and Nation State Actors who are looking to change the world or steal information on behalf of their country’s government. And then there’s the Insider leaking sensitive information accidentally or on purpose with malicious intent.

bae - the usual suspects

These are all just some of personas BAE Systems recently identified as key threats to businesses and without them, cybercrime can’t exist.

Wising up to phishing attacks

In the IT space, one of the most common ways cyber criminals target employees of a company is through phishing. In the aforementioned celebrity photos case, court documents said Ryan Collins, 36, of Pennsylvania, hacked more than 100 people. According to reports in the press he used email names like ‘e-mail.protection318@icloud.com’ and asked for password details.

With these credentials, the hacker was able to go through email accounts looking for photos and videos, managing to get into around 50 iCloud accounts and 72 Gmail accounts mostly belonging to celebrities. It’s quite easy to imagine the damage hackers could cause if they got hold of corporate emails – think of the damage the 2014 Sony hack inflicted.

You can’t patch a human

Employees will always be a weak spot, and clever social engineering is leading to more examples of how this weakness can be exploited. The effects can be devastating. For example: a company that collects credit card data from its customers is at risk of a major data breach from a single employee clicking on an email leading to a website laced with malware. The financial and/or reputational damage and the related fines or compensation claims that result could be significant.

At its core, combating social engineering is a human problem that requires human solutions. In certain cases victims may violate policies, but it may often be the case that the rules or training were not clear enough for the employee to know they were doing something that could have serious consequences. And because humans are behind social engineering attacks, they are capable of evolving, matching the way the business world is using technology.

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To mitigate against social engineering attacks, there needs to be security awareness and culture from top to bottom. This might mean ongoing training for employees to understand the threats, as well as the right policies and procedures in place. This helps employees understand the risk from social engineering and what role they have in preventing it. Remember, this all has to be done in tandem with putting the right technology in place.

Defeating the Unusual Suspects

Defending against cyber threats is all well and good, but what about catching these Unusual Suspects? This is difficult, because they use sophisticated tactics to escape detection–they are located all over the world, and use secure software to escape detection and remain anonymous, often routing communications through multiple countries to avoid being caught.

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Fortunately this is a case where human fallibility is a good thing–criminals will make mistakes and leave digital finger prints that sophisticated analytics and forensic analysis can pick up. Finally don’t underestimate the power of human ingenuity–thanks to the efforts of security professionals, we’re finally getting to a point where the investigation of online crime is being slowly demystified and defenses put in place to mitigate the threat.

NFL Admits Game’s Link to Concussion Risk

football

After years of denying that the game of football could have caused degenerative brain disease in some players, the National Football League has finally admitted there is a link connecting the game to chronic traumatic encephalopathy (CTE). According to the New York Times:

Representative Jan Schakowsky, Democrat of Illinois, asked during a round-table discussion about concussions whether “there is a link between football and degenerative brain disorders like CTE,”

Jeff Miller, the NFL’s senior vice president for health and safety policy, said, “The answer to that is certainly, yes.” His response signaled a stunning about-face for the league, which has been accused by former players and independent experts of hiding the dangers of head injuries for decades.

Miller’s comments were backed the next day by league spokesperson Brian McCarthy. Miller’s answer may actually help the NFL, as “It could make it harder in the future for a player to accuse the league of concealing the dangers of the sport,” the Times said.

“Strategically, the NFL’s admission makes a world of sense,” Jeffrey A. Standen, dean of the Chase College of Law at Northern Kentucky University, told the Times. “The league has paid a settlement to close all the claims previous to 2015. For future sufferers, the NFL has now effectively put them on notice that their decision to play professional football comes with the acknowledged risk of degenerative brain disease.”

While CTE has been found in former players, the NFL has for decades denied the danger, even after researchers with Boston University announced in 2014 that, in autopsies of 79 brains of former NFL players, 76 tested positive for CTE. A report in 2003 by the Center for the Study of Retired Athletes at the University of North Carolina found a connection between concussions and depression among former professional football players.

According to a 2007 UNC study, Recurrent Concussion and Risk of Depression in Retired Professional Football Players:

Our observed threefold prevalence ratio for retired players with three or more concussions is daunting, given that depression is typically characterized by sadness, loss of interest in activities, decreased energy, and loss of confidence and self-esteem. These findings call into question how effectively retired professional football players with a history of three or more concussions are able to meet the mental and physical demands of life after playing professional football.

The NFL has directed millions of dollars to research of CTE and head trauma and it gave $45 million to USA Football to promote safe tackling and reassure parents that football’s risks can be mitigated through on-field techniques and awareness, the Times said.