Misrepresenting yourself is easy to do in a world where many of our interactions exist online. Why not put that profile photo of yourself up at the gym from a few years ago when you went there regularly? You’ll eventually get back to working out. There’s no harm in it. Deceptive? Sort of. But in a situation like that, while misleading, it likely won’t cause issues if uncovered. But what about misrepresentation when it comes to your business? If you apply for cyber insurance and have cybersecurity measures and tools you’ve purchased but don’t use, is it lying to say that they are “in place”?
In the News
A recent court case from Travelers Insurance asks for a policy to be rescinded based on misrepresentation in that exact scenario. On July 6th, 2022, Travelers filed a motion based on a cyber insurance policy that they had issued in April to International Control Services (ICS). When the policy was issued, ICS declared that it had in place, and was using, multi-factor authentication (MFA) on its server. This was verified by a CEO-signed policy application, with an additional signature from “a person responsible for the applicant’s network and information security.”
What Happened?
In May, ICS suffered a ransomware attack. Through the investigation procedure, Travelers Insurance learned that they (ICS) were not using MFA as indicated. Travelers Insurance believes that the application statements were misrepresentative and concealed the actual truth of the situation. Additionally, there was a December 2020 incident in which ICS had been compromised. The company confirmed in the application process that they had improved their cybersecurity. Travelers Insurance asks the court to declare the insurance contract null and void. They also want to rescind the policy and declare it has no duty to indemnify or defend ICS for any claim.
Staying Secure
A cyber insurance policy is essential in protecting your business, but filling out the application can be intimidating. Reynolds + Rowella’s Cybersecurity Team can guide you through the application process and help ensure you have the right protections in place that your insurer is looking for. This way, you are not just safer, but your policy is right-sized to you from a price and liability standpoint. Contact Jarrett Meiers, Director of IT + Cybersecurity, today!
Reynolds + Rowella is a regional accounting and consulting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve. Our mission is to operate as a financial services firm of outstanding quality. Our efforts are directed at serving our clients in the most efficient and responsive manner possible, delivering services that exceed the expectations of those we serve. The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, please contact Elizabeth Bresnan at 203.438.0161 or email.
