WIN Magazine - Winter 2013 - (Page 30)

FEATURE NEW WHOLESALE INSURANCE PRODUCT FOCUS: PROTECTION FROM HACKED BANK ACCOUNTS: PROTECTING SMALL BUSINESS POLICYHOLDERS BY C. RICHARD PETERSON N INETY PERCENT OF sm a l l bu sinesses, according to Juniper C om mu n ic at ions, have been hacked. If your computer is hacked and you store, like most people, all of your user names and passwords, cyber thieves will now control all of your services requiring user names and passwords. Once the hacker has your information he or she takes on your identity and goes directly to your bank account to empty it out. The bank doesn't know it isn't you and, by law, isn't responsible for hackers stealing your money. Within a year, according to Symantec and Congressional studies, over 63% of businesses that are hacked are out of business. Naturally, when vendors call to tell you that your check has bounced and you look online and see all of your money is gone, you call your friendly banker. The bank officer proceeds to tell you the astonishing news that the bank is not responsible for replacing your hard earned cash under the U.S. banking laws. Showing sympathy, the officer explains that personal accounts are protected under Federal Reserve Regulation E, if the bank is given timely notice of the theft from the account. However, for commercial accounts, there is no Regulation E, and the bank is legally off the hook. SCARY STATISTICS This is a real world scenario, and cyber theft is occurring every day and night. Here are facts you need to know: * The FBI estimates that $1 billion was fraudulently transferred from U.S. bank accounts in 2012 and the severity of cash stolen is tripling every year. * According to a study by the insurer Hartford Steam Boiler, three quarters of these companies did not recover their stolen cash. * A study by the software security firm McAfee found that cyber crime cost U.S. companies $100 billion in losses during 2012. 3 0 | v i e w t h i s i s s u e a t | WHY YOU NEED INSURANCE Your account was targeted by the bad guys or randomly hijacked, and the loss is now yours. How are you going to pay your employees on Friday and your creditors? And what about the rent and a bank loan repayment coming up soon? The copy machine leases? And how will you pay yourself? You can't make this stuff up. The exposure to a small business or nonprofit is real, and the sudden disappearance of cash can destroy your small enterprise. Then you remember something about FDIC (Federal Deposit Insurance Corporation) protection. That's the solution. The FDIC will cover your stolen funds, or amounts up to $250,000 per account. You are now back in business...or are you? While the FDIC insurance covers loss of cash in your account (up to $250,000 per account), it does so only if the bank itself goes out of business or is taken over by the regulators. This is not the case with your loss, and the money will not be replaced in your account. You are on your own.

Table of Contents for the Digital Edition of WIN Magazine - Winter 2013

Disappearing…and Reappearing Risk: What Lies Ahead
An Innovative Solution for Reducing the Debt of College RMI Students
Does Politics Influence Regulatory Forebearance?
Predictive Analytics: The “Black Box” Used by Savvy Insurance Professionals
Just the Facts—On FATCA: Frequently Asked Questions on the Foreign Assets Tax Compliance Act
Your Reputation Matters, Online and Off
New Wholesale Insurance Product Focus: Protection from Hacked Bank Accounts: Protecting Small Business Policyholders
In the WIN-ner’s Circle
Index to Advertisers/

WIN Magazine - Winter 2013