Home Business The crucial role of cyber liability insurance for your business

The crucial role of cyber liability insurance for your business

by Cedric Guzman

In recent years, cybercrime has emerged as a significant threat to both individuals and businesses, with financial losses escalating rapidly. According to the FBI’s Internet Crime Complaint Center annual report, cybercrime complaints more than doubled from 2018 to 2022, with losses skyrocketing from $2.7 billion to $10.3 billion during the same period. Among the industries targeted for cyberattacks, logistics and supply chain businesses, including freight brokers, are particularly vulnerable due to their critical role in the economy.

Freight brokers, who act as intermediaries between carriers and shippers, rely heavily on various tech platforms in their daily operations. These platforms handle sensitive data, making them attractive targets for cybercriminals. The consequences of a data breach for a freight broker or their business partners can be severe, ranging from identity theft and reputational damage to financial loss and the potential loss of valuable contracts.

Cybercriminals are constantly evolving their tactics to deceive their victims, and today, social engineering techniques pose a significant risk. Social engineering involves manipulating individuals into unknowingly compromising their own data. It can take various forms, such as phishing (via email or websites), vishing (through voice communication), and smishing (via SMS or text messages). Freight brokers need to be particularly cautious to avoid falling victim to social engineering attacks.

For example, a freight broker might receive an email notification claiming that someone has left a negative review for their company on a load board platform. The email includes a link to the review, and if the broker unknowingly logs in through the link, they inadvertently give their account credentials to the attacker, who can then impersonate the broker on the platform and post fake loads. This scenario is just one example of the many potential cyber threats freight brokers face.

Another significant cybersecurity threat is ransomware, a type of malware that encrypts a user’s data and holds it hostage until a ransom is paid. Ransomware attacks can be highly costly, not just due to the ransom itself, but also because of the associated expenses required to resolve the situation and get the business back up and running.

To mitigate the risk of cybercrime, freight brokers can take several measures. Firstly, enabling multifactor authentication (MFA) whenever possible adds an extra layer of security. MFA requires two or more forms of credential verification when logging in, ensuring that the person accessing an account is genuinely the owner. Continuous training for employees is also crucial to prevent them from becoming victims of cybercrime, especially social engineering schemes.

Over the past few years, cyber liability insurance has become increasingly important for freight brokers, as they recognize the need for a plan to mitigate the damage caused by cybercrimes. Reliance Partners, a trucking insurance agency, offers cyber liability protection specifically tailored to the needs of freight brokers. This coverage includes protection for identity and data recovery, loss of income from network outages, ransom payments to regain access to data, lawsuits arising from privacy breaches, public relations, and regulatory fines.

Reliance Partners works with a wide range of cyber liability markets and can tailor coverage to fit the specific needs and exposure of freight brokers. Coverage limits typically start at $1 million to $5 million, but higher-revenue customers may require greater limits based on their exposure and risk of loss. It is important for freight brokers to work with an insurance agent who specializes in their specific operation type to accurately assess their exposure to cyber threats.

Although the transportation industry may always be targeted by cybercriminals seeking financial data and sensitive information, freight brokers can better protect their businesses by taking precautions and safeguarding themselves with cyber liability insurance. By implementing security measures and investing in comprehensive coverage, they can minimize the significant financial risks posed by cybercrime.

To learn more about Reliance Partners and their cyber liability protection for freight brokers, interested parties can visit their website for further information.

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