Beyond Data Breaches: Lesser-Known Cyber Risks That Could Cripple Your Business

In today’s landscape, cyber threats extend far beyond the traditional data breach. While ransomware and data theft dominate headlines, businesses are increasingly falling victim to lesser-known but equally damaging cybercrimes, like invoice manipulation, funds transfer fraud, and dependent business interruption.

Cyber Insurance: A Critical Line of Defense
Cyber insurance is a foundational component of a business’s risk management strategy. But not all policies are alike. Knowing what your policy covers—and what it doesn’t—can make the difference between full recovery and serious financial loss.

Funds Transfer Fraud
This occurs when a business unknowingly wires funds to a cybercriminal, often through social engineering or fraudulent payment instructions. The speed of financial transactions makes recovery difficult, and banks often disclaim responsibility. Some cyber policies offer endorsements to cover this threat, but many require specific controls, like dual verification, to trigger coverage. These controls should be built into your broader cybersecurity plan.

Invoice Manipulation
Cybercriminals may gain access to or spoof your email systems and alter invoices. Customers and vendors then unknowingly send payments to fraudulent accounts. This type of breach can remain undetected for weeks or months, compounding financial losses. Look for cyber policies with coverage specifically designed for social engineering or invoice manipulation.

Dependent Business Interruption
Not all cyber disruptions stem from your own systems. Increasingly, businesses are impacted by events affecting cloud providers, payment processors, or other third-party vendors. These disruptions can grind your operations to a halt—even if your internal systems remain unaffected. Comprehensive dependent business interruption coverage can help mitigate these losses by reimbursing lost income, extra expenses, and recovery costs.

Stay Ahead of Emerging Threats
As cyber risks grow in complexity, it’s essential to work with brokers who specialize in this space. Your policy should evolve as the threat landscape shifts—and so should your protection strategy.

 

In the meantime, here are our top three things to review:

1. Does your cyber policy cover funds transfer fraud, and do you have dual verification controls in place?
2. Are you protected against invoice manipulation through endorsement?
3. Do you have dependent business interruption coverage for losses caused by third-party outages?

 Need help reviewing your current cyber coverage? Your team at Seubert is ready to support you.