Cyber Threats in the Jewelry Industry: Why You Are at Risk

Cybersecurity breaches and cybercrime create some of the most pervasive problems in our digital age, and no industry is immune, not even jewelry. The majority of jewelers are small businesses, which tend to be more susceptible to cyberattacks. The following information can help you better understand cyber threats while offering tips to protect you and your business.

What is the difference between a cybersecurity breach and a data breach?

A cybersecurity breach is the unauthorized disclosure of electronic information to a party, usually outside the organization, that is not authorized to have the information. A security breach may or may not involve sensitive information. For instance, security breaches include impersonation, defacement of a website, and denial of services. Conversely, a data breach involves the release of sensitive, protected and/or confidential data, such as social security numbers, credit cards and personal health records.

How prevalent are cybersecurity breaches?

Incidents of cybersecurity breaches and cybercrime are growing at a feverish pace. Nearly two-thirds of cyberattacks are perpetrated on small and mid-sized businesses¹. There was a 40% increase in cyber breaches in 2016². According to the 2017 Hiscox Credit Readiness Report³, 68% of small businesses and 72% of large firms experienced a cyberattack in the last 12 months.

Why do jewelers need cyber protection?

Cyberattackers continue to evolve, making it challenging for businesses to stay ahead of the growing threat. Many small and mid-sized companies are not ready for the type of loss a cyber incident can cause. Just one attack can cost a mid-sized business between $84,000 and $148,000⁴ in recovery expenses, a devastating impact as operations can come to a halt while the breach is assessed. Other impacts of an attack include damage to business reputation and trust.

What options can help mitigate the financial impact of a cyberattack?

Cyber liability insurance helps small and mid-sized U.S. based businesses lessen the financial impact of cybercrime with the help of experienced risk mitigation specialists.

The typical cyber policy has third-party coverage or basic coverage for litigation, privacy claims and fines resulting from a security breach. The solution goes beyond third-party coverage to include first-party coverage for the more complicated and expensive consequences, like cyber extortion, loss of business income and losses due to covered network disruption. This is an important distinction to note, as 90% of claims are first-party liability⁵.

First-party coverage includes:

• Forensics investigation
• Business interruption
• Security breach response
• Paying cyber extortionist
• Credit monitoring
• Regulatory defense and income and digital asset restoration

Learn more about the holistic shipping and insurance solutions Parcel Pro and UPS Capital offer AGS member companies. In addition to insured transportation services, the Parcel Pro and UPS Capital corporate family offer customizable jewelers block policies, trade credit insurance to cover receivables and cyber liability insurance.

References:

1. Propertycasualty360.com, 5/27/2015. http://www.propertycasualty360.com/2015/05/27/small-mid-sized-businesses-hit-by-62-of-all-cyber
2. Bloomberg Technology, 1/17/2017.
3. The 2017 Hiscox Cyber Readiness Report. http://www.hiscox.com/cyber-readiness-report.pdf
4. The Guardian (U.S. edition) 1/21/15. https://www.theguardian.com/business/2015/jan/21/cybersecurity-small-business-thwarting-hackers-obama-cameron
5. AIG Internal Analysis.