5 Reasons Why Recruiting & Staffing Companies Need Cyber Insurance
Benefits of Cyber Insurance
The personal information for 711,000 jobseekers was exposed when a hacker gained access to a server at a specialist recruitment firm in the UK. An independent technology expert was contacted by a third party as a result of the hack. Only then did the recruitment firm find out their information had been stolen. Here are five reasons why recruiting and staffing companies need cyber insurance.
- Privacy liability
Staffing companies collect massive amounts of sensitive information on their candidates, employees, contractors, and clients including personally identifiable information (e.g. names, social security numbers, etc.) and financial information. As such, hackers target staffing companies with W2 scams year after year.
- Notification, forensic and legal costs
Should there be an actual or suspected breach, the staffing company legally needs to notify every individual whose personal information has been exposed. For this to happen, a forensic analyst ($250-$500/hr) will need to determine the scope of the breach and then a law firm will get involved to notify each individual according to the laws of the state in which they reside. Once individuals are notified, there’s a higher chance of a lawsuit, which can be staggering.
- Business interruption and system damage
Staffing companies rely heavily on their computer systems every day to track down leads, set up interviews, review contracts, pay employees, etc. Not only will you have to pay a firm to recover and rebuild your data, but also, in an industry as competitive as staffing, every hour your systems are down literally costs you money.
- Cyber extortion
An organization’s security is only as strong as the judgement of its employees. All it takes is one employee clicking on what appears to be an innocent link, but is actually “CryptoLocker” malware, for all of the company’s data to be encrypted within seconds. A hacker will then contact the organization asking for a “ransom” ranging from a few thousand dollars to millions to decrypt the files. This is the most prevalent attack today as it’s used against every industry. Certain types of CryptoLocker are free to download on the internet by hackers.
- Cybercrime/social engineering
Cybercrime (i.e. social engineering) is one of the most frequent claims in cyber insurance to date. Cybercriminals will trick financially responsible employees of the staffing firm to send money to a fraudulent bank account. Hackers have become patient and will often sit in the system undetected monitoring and intercepting email activity before executing their scam. Their tactics range from posing as the CEO, a vendor, or client to simply creating fake employee profiles in the payroll system to siphon money out. Staffing firms place contract employees every week and place these contractors on their own payroll. A couple extra “contractors” coming on and off the books could easily go unnoticed.
Contact the Assurance ‘A’ Team to learn more about adding this important coverage to your portfolio.
Source: https://evolvemga.com/Evolve MGA – Cyber Insurance Specialists. Hackers Evolve, Your Cyber Policy Should Too.
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