Transportation companies need to protect themselves against cyber threats.
Most transportation company owners and managers understand the critical risks of their business—truck crashes and injured drivers being the primary source of losses. However, truckers are increasingly vulnerable to cyber criminals who want to steal your sensitive driver data, disrupt your computer systems, or access your bank accounts. With these types of risk affecting more companies, it may be time to consider protecting yourself both through improved IT processes and possibly a cyber insurance program. As one Midwest trucking company learned, a well-executed cyber attack can result in a six-figure loss. Furthermore, more than a third of cyber crimes are committed against businesses with less than 100 employees.
Let’s break down key cyber threats facing trucking companies today:
- Theft of Drivers’ Personal Data
Most companies keep detailed driver files, including drivers’ license numbers, social security numbers, and other federally-protected information. Did you know that if this data is lost or stolen, your company may be legally obligated to notify past, current, and prospective drivers about the breach and provide them credit monitoring services? According to a 2018 Ponemon Study, it costs a business an average of $148 per stolen record to investigate a data breach, notify potentially affected individuals, and provide required credit monitoring services. Federal privacy laws don’t even require a data breach for your company to take action—a lost or stolen laptop, tablet, or mobile device containing this information opens you up to cyber liability.
- Theft of Funds Via Phishing Scams or Fraudulent Transfers
Have you or your employees ever received an email from a trusted vendor instructing you to send payment to a new address or bank? Many of these emails are actually a type of social engineering fraud—they appear to be completely legitimate but are actually from hackers who are trying to steal from you. One of our clients lost nearly $250,000 in one of these schemes, and after investigation with the FBI, found that they had been tricked into wiring funds to a hacker group in Thailand. It’s critical that you and your accounting department verify all bank or wire transfer change requests directly with your payee—do not assume just because an email seemingly came from your vendor that they actually sent it.
- Interruption of Business Operations Due to a Network Security Breach or Ransomware Attack
Your employee receives an innocent-looking email with an attachment and downloads it. Suddenly, your computer system is under attack and hackers are demanding payment in bitcoins to reopen access to your system and backup data. This is just one type of cyber attack that can cost thousands of dollars between IT support, paying the ransom, and most critically, lost business income. Every company should educate employees on detecting suspicious emails and work with your IT vendor to have the appropriate antivirus and other software. One of our clients lost nearly two weeks of productivity due to an extensive ransomware attack where the hacker had accessed their system through a voicemail server. The total cost neared six figures.
You may decide to self-insure for cyber risks such as these, but often the cost of coverage is affordable compared to the potential risk for your company. A well-rounded cyber insurance program may include coverage for third party cyber liability claims, business interruption and cost of restoring your network, and theft of company funds. This may require two separate policies—a Cyber/Network Security policy and a Crime/Theft policy with a Social Engineering Fraud endorsement, though there are some programs that can combine these coverages.
With the evolving risks to your business, it’s important to partner with an insurance agency that helps you understand potential losses such as cyber threats. As always, the trucking insurance professionals at The Daniel & Henry Company are here to help you understand what measures you can take to reduce risk and insurance costs. Please call us today at 1-877-406-5915 or email us at RuebsamJ@danielandhenry.com