Cyber risks have come to the forefront in the art community recently, with media reports of galleries and collectors being targeted by criminals through an email hacking scam, resulting in the hackers being able to steal significant sums of money.
By intercepting email communications between galleries and their customers and altering bank details on sales invoices, collectors have unknowingly fallen prey to transferring money to the hackers for works they have purchased. This is a unique deception and it can be very challenging to try to recover the funds.
A common perception of cyber risk often relates to the well-publicised and costly data breaches suffered by large commercial organisations, such as Uber, Yahoo and Equifax.
For smaller, art organisations who don’t sell inventory online or hold clients’ payment information, risks associated with cyber-attacks may appear inconsequential.
However, in reality cybercrime can apply much closer to home, impacting businesses in a variety of ways. Whilst many of the headline attacks have related to data breaches, the majority of smaller claims resulting from cyber incidents are instead due to crime, such as malware attacks, phishing scams and social engineering.
Specific examples can include employees being targeted by third parties who impersonate senior personnel and request the payment of fraudulent bills, or extortion demands being made following a threat to infect systems with malware.
What do these developments mean for our clients?
There are a number of practical steps that can be taken to minimise these threats.
For galleries, implementing dual authorisation when making payments can help to reduce the likelihood of a social engineering loss and ensuring that anti-virus software is kept updated can help to improve security.
Furthermore, it is important to use different passwords for different systems and to change them regularly, in order to minimise the risk of a single password breach resulting in exposure to multiple programmes.
And for collectors, when receiving an invoice from a gallery it would be beneficial to call the gallery directly to verify that the bank details are accurate before making any payments.
For a small business that is targeted by criminals, understanding the best way to handle a cyber related incident in order to minimise disruption can be challenging.
However, for each of the situations outlined above, it is possible to obtain innovative insurance protection.
In addition to providing coverage against financial loss, perhaps more importantly a tailored cyber policy can also provide incident response assistance.
By helping small business owners to manage a cyber attack, from communications with clients through to IT forensics; this invaluable resource can help to ensure that operations return to normal as quickly as possible, whilst minimising any damage to the business.
For further information please contact Ruth Watson, Partner on +44 20 7466 6256 or email email@example.com
This blog is compiled for the benefit of clients and prospective clients of companies of the JLT group of companies (“JLT”). It is not legal advice and is intended only to highlight general issues relating to its subject matter; it does not necessarily deal with every aspect of the topic. Views and opinions expressed in this document are those of JLT unless specifically stated otherwise. Whilst every effort has been made to ensure the accuracy of the content of this document, no JLT entity accepts any responsibility for any error, or omission or deficiency. If you intend to take any action or make any decision on the basis of the content of this document, you should first seek specific professional advice. The information contained within this document may not be reproduced and nothing herein shall be construed as conferring to you by implication or otherwise any licence or right to use any JLT intellectual property. If insurance and/or risk management advice is provided, it will be provided by one or more of JLT’s regulated companies depending on the territories requiring insurance and/ or risk management advice. www.jlt.com