A recent bank account takeover has resulted in a loss of $1.5 million for a California escrow service, according to Krebs on Security (see here). Krebs is an expert on cyber risk exposure from hacking.
Escrow agencies, and any organization with significant cash balances, should have appropriate coverage – either crime coverage including computer theft or Cyber Risk Insurance covering loss of money. But most do not. In this case, a number of fraudulent wires were directed from Efficient Services Escrow to Russia and China. One was recovered, the rest were not. Krebs notes that:
Title and escrow firms are a favorite target of cyber thieves, precisely because banks are accustomed to these customers moving large amounts of money around on a daily basis.
We have commented on bank account takeover against escrow services and other businesses a number of times, including:
The exposure to theft of money is real, and hackers are targeting small to medium sized businesses. This particular incident involves escrow services, but the exposure exists in any small to medium sized business with significant sums of cash. Examples of other companies with this exposure include insurance agents, advertising agencies and construction companies. With the right policy, theft of money by hackers can be covered through Cyber Risk Insurance.
Cyber Risk insurance coverage provides protection from various risks associated with technology, including data breaches, but policy forms are not all the same. Cyber Risk insurance is easy to obtain, provides broad protection and is inexpensive. As a wholesale broker, we provide Cyber Risk insurance to all types of organizations through retail insurance agents and brokers.