The crucial role of cyber liability insurance for your business

Cybercrime poses an increasing financial threat to individuals and businesses. According to the FBI’s Internet Crime Complaint Center annual report, cybercrime complaints more than doubled from 2018 to 2022. During the same time, losses skyrocketed from $2.7 billion to $10.3 billion.

Logistics and supply chain businesses are often targeted for cyberattacks due to the industries’ critical role in the economy. This includes freight brokers, who, as the intermediary between carriers and shippers, have unique exposures that can put their businesses at risk of cyberthreats. Freight brokers use multiple tech platforms on a daily basis, including load boards, carrier vetting software companies and their own technology, which sensitive data flows through.

A lot is at stake if a freight broker or the broker’s business partner’s data is compromised. It can lead to identity theft, reputational harm, financial loss and loss of business and valuable contracts.

Cybercriminals are always evolving their methods to trick their victims, and today social engineering tactics pose a particularly significant risk. Jamie Cannon, vice president at Reliance Partners, a trucking insurance agency providing cyber liability coverage for freight brokers, noted an increase in reported claims of social engineering, making it something brokers need to be particularly careful to avoid.

Social engineering involves the manipulation of individuals to get them to unknowingly compromise their own data. It can take multiple forms, including phishing (carried out via email or websites), vishing (carried out through voice communication) and smishing (carried out through SMS or text messages).

A social engineering attack can happen suddenly. Consider this potential scenario: A freight broker receives an email notification that someone left a negative review for his company on a load board platform, which includes a link to the review. The broker logs in through the link, and unknowingly gives the perpetrator his account credentials. The bad actor then has free rein to impersonate the broker on the load board and post fake loads. This is just one potential scenario of many that could and do occur. 

Another significant cybersecurity threat is ransomware. It’s a type of malware that, when deployed, encrypts a user’s data and holds it hostage until a ransom is paid. In essence, it prohibits a business from operating until the victim pays. Ransomware attacks can be costly not only because of the ransom, but also because of associated expenses to resolve the problem.

“Having protection against this to ensure you’re back up and running, and have coverage for loss of business during this time, is extremely important,” Cannon noted.

To provide an extra layer of security and lessen your risk, Cannon recommends enabling multifactor authentication (MFA) when possible and working with tech providers that offer it. MFA requires two or more forms of credential verification when logging in, which helps to ensure the person accessing an account is really the owner of it.

Also encouraged is continuous training to prevent employees from falling victim to cybercrime, especially social engineering schemes.

Over the past two years, cyber liability insurance has become an important strategy for many freight brokers as they’ve recognized the importance of having a plan to fall back on. Reliance Partners offers cyber liability protection for freight brokers specifically to help them mitigate the damage in the event of cybercrimes.

Reliance Partners’ cyber liability protection can include coverage for:

• Identity and data recovery.
• Loss of income from network outages.
• Ransom payments to gain access to your data.
• Lawsuits due to privacy breaches.
• Public relations.
• Regulatory fines.

Reliance Partners has access to a large variety of cyber liability markets and shops coverage annually based on the insured’s exposure and requirements.

“Our freight broker exposure is different, and our top priority is to tailor coverages to fit their specific needs,” Cannon said.

Cannon recommends coverage limits starting at $1 million-$5 million, but higher-revenue customers may need greater limits based on their exposure and risk of loss. However, all revenue sizes have some exposure.

“Some cybercriminals target smaller to mid-sized companies that may not have the same level of software protection larger companies often have in place,” Cannon warned.

Working with an insurance agent who specializes in your operation type is important to properly identify your exposure. Reliance Partners has offered cyber liability coverage as part of a comprehensive package since its inception, and it works with markets that are familiar with vulnerabilities freight brokers face.

Although the transportation industry may always be threatened by cybercriminals targeting financial data and sensitive information, freight brokers can better protect their businesses by taking precautions and shielding themselves with cyber liability insurance.

Learn more about Reliance Partners here.