Insurance, Silent Cyber, and Refused Claims, Oh My!

This is a companion blog posting to my Episode 1 Podcast about Insurance, etc. which can be found on the Podcast page of this site, or on all good podcasting platforms, including Google, Apple, Spotify, Pocket Casts, etc.

Disclaimer

I am not an insurance specialist, I am a techie with over 30 years of real-world experience in malware, over 15 years of ethical hacking experience and over 10 years of digital forensics (incident response) as well as working for a large cyber insurer for over 2 years (note past tense) where I worked hand-in-glove with underwriters, brokers and claims staff in helping them understand cyber risks, defences and remediation. I also used to meet with CISOs, IT Security Managers and Risk Managers/Legal Council to understand their risks and processes, procedures, technologies, business partners, supply chain and cloud/outsourced services.

I run my own business; I do not work for an insurer or sell insurance (of any type). However, when I did work for an insurer, along with being the cyber risk specialist assisting underwriters, brokers and claims adjusters. I also trained many cyber underwriters, helping them to understand the technology, the lingo (acronyms) and what are the right questions to ask (and what are good answers), when to ask them, and to who (so that they could have meaningful risk dialogue with CISOs, IT Managers, etc.) The underwriters then can understand the answers given and price the risk appropriately, rather than just fearing a worse case scenario, and pricing according to their fears/expectations (which is far better situation (both on cover/limits and pricing) for the insured/client too)!

“Silent” Cyber

For those of you that are not in the insurance industry, you may not be aware of this term and what the implications are to existing (non-Cyber) policies, such as Property, Casualty, D&O, Kidnap and Ransom or Crime.

In simple terms, Silent Cyber is used to describe the case where cover for Cyber threats is not explicitly mentioned in the policy wording/coverage. As the insurers would say, these non-Cyber policies do not have “affirmative” cover.

What this means to you as a policy holder is that the insurer may not honour a claim if it is Cyber related for a non-Cyber policy (even if you have a Cyber extension to that non-Cyber policy). Why, because the wording and terms and conditions in force will be those from the master policy (the non-Cyber one/the main policy). This can cause claims to be rejected, as can be seen in the next section of this article.

Refused Claims

There have been two recent cases reported where the insurer has declined to pay a claim in relation to the NotPetya attacks back in June 2017, these are Hiscox vs DLA Piper and Modelez vs Zurich.

Despite what the press and other media has claimed, in both cases that the policy was a cyber policy and the reason stated by the press or other media for the claim being declined was down to an “act of war, or hostile action”.

From what I have found out, neither of these claims are in relation to Cyber Insurance policies, in fact they both are related to Property policies (which are, even with a cyber extension added on, not the same as a dedicated Cyber Policy.   Very sloppy reporting, which doesn’t help anyone…

So, this has resulted in every person and their pet of choice making statements, such as “well, what is the point of buying insurance as the insurer will weasle their way out of having to pay” and “there is no point in buying cyber insurance, as I’ve seen what happened to the claims from Mondelez and DLA Piper”.

Expecting wide-ranging/expert Cyber coverage from a Property policy is like expecting wide-ranging/expert Health insurance from your House and Contents policy! Not surprisingly you will not get comprehensive health cover backed by experts in this area. It’s a bit like expecting your gardener to offer health screening (without them being a medical practitioner).

A few days a go a written statement was sent to SC Media UK (owner of the SC Magazine) in which Kylie O’Connor, the head of group communications at Hiscox stated “The dispute we are in with DLA Piper, is not about a cyber policy and has nothing to do with a war exclusion.” This just proves that the press and other media were (shock, horror) making things up so that they could publish (without little things like “facts” get in the way!

However, in the case of Norsk Hydro, they do have a dedicated Cyber policy, and therefore are covered under that policy (up to their limit, and after taking into account any excess, waiting period, and loss adjustment).

Why do companies invest in cyber insurance?

Well, for lots of reasons, including the ones listed below:

  • Hacking (external or internal misuse)
  • Physical loss of data (left on train, back of cab, accidents (sending data to the wrong person, etc.)
  • Data corruption or eraser (cost to recover or recreate), even paying for ransomware decryption keys.
  • Business Interruption, such as DDoS, Ransomware, etc. including loss of business
  • Costs for first response (forensics, legal, PR), etc. covered under the policy
  • PCI and other fines covered (where legally allowed)
  • Bricking (where a device becomes unusable due to a firmware or other update failing).
  • Legal or contractual requirements (from industry, business partners, etc.)
  • In some cases the insurer will offer services/solutions/products to help the insured improve their overall security posture/maturity for free (as part of the policy) or at a discounted price.

At the end of the day suffering a cyber breach has almost become “normal” and “expected” as not a day seems to go by when we don’t hear about yet another breach (new or historical); a good cyber insurance policy can help offset the risk and related costs for such breaches/incidents.

Then there are new risks/attacks such as CryptoJacking and Password Spraying (O365 and GSuite targeted via IMAP and even if 2FA or MFA is enabled they may be able to get in to your account).

What are  the ways that companies could avoid falling into this crevasse?

Check the policy you have is fit for purpose, check with your insurer or broker. I strongly suggest that you ask your insurer or broker which scenarios/risks you are covered for by the policy and if you identify gaps in your existing coverage decide if the cost of taking out extra insurance is a good risk/benefit trade-off or solution.

Check that the coverage includes first response (forensics, legal and PR services), that you have enough cover for business interruption, including lost business and remediation costs. Also consider the brand/reputational damage and knock-on customer effects, loss of trust, etc.

Check to see that the policy will cover financial fraud, such as BEC/Fake CEO, employee fraud, if not, find a crime policy that includes this. Crime policies are not the same as a Cyber policy as what they cover is different, or from a different perspective.

Make sure that the Limits, waiting period and excess is suitable for your business needs.

Don’t go for the cheapest, especially if the insurer/broker only ask 5-10 questions and doesn’t sit down with your CISO or IT Manager, etc. to discuss the answers afterwards (very few questions can be answered yes or no; they are usually a bit of both and the answer may vary across a typical organisation), as may the questions that should be asked by the Insurer or Broker.

The Future?

Even though a dedicated Cyber policy is a far better bet in today’s incident/breach strewn world, there are some things that they still don’t cover.

I want to see the Insurance industry step up and make Cyber policies more inclusive; it would be better if Crime cover was also included (including not only crime and fraud due to hacking, but also fraud due to social engineering or insiders/insider collusion). This should include BEC/Fake CEO and Invoices, etc. even when NO hacking or breach has occurred!

In Summary

Organisations need to ensure (no pun intended) that the existing Insurance policy or policies they have are fit for purpose and will actually pay-out when needed. You need to purchase the right policy type for the right risk, as otherwise you could end up in the same situation as DLA Piper and Mondelez… If in doubt check with your insurer or broker, before it is too late!

Update 15th April, 2019: It has come to my attention that Merck is also suing their insurer for refusing a claim; again it is NOT a Cyber policy, it is in relation to their Property policy.

Ransomware – Extortion by any other name, would be as bad!

This is a companion blog posting to my Episode 0.5 (the Teaser) Podcast about Ransomware, etc. which can be found on the Podcast page of this site, or on all good podcasting platforms, including Google, Apple, Spotify, Pocket Casts, etc.

Ransomware is not new, but how many of you actually know when it first appeared?

Believe it or not, the very first Ransomware appeared in 1989; yes you read that right! Want to know more, then read on, and I’ll explain the history and major changes that have occurred since that very first Ransomware way back in 1989…

Back in Time

The very first Ransomware was the so-called AIDS Trojan which was supplied on a 5.25″ Floppy Disc to thousands of  attendees of the World Health Organisation’s AIDS Conference and also mailed out to over 20,000 individuals across Europe.

The disc was created by PC Cyborg which was the company run by Dr. Joseph Popp and it contained a program that claimed to work out your risk/chance of catching AIDS (now called HIV). If you inserted the disc into your IBM (or compatible) PC and ran the program, it would indeed do what it claimed; however after 90 boots/reboots the malicious payload (encryption) would trigger and you would see the following:

AIDS Trojan Ransomware

Ironically, if you actually read the EULA that came with the disc, it clearly explained that you needed to pay a licence fee to use it and that it would encrypt your system if you didn’t pay, sound familiar?

Here is part of the text of the supplied EULA:

"If you install [this] on a microcomputer...
then under terms of this license you agree to pay PC Cyborg Corporation in full for the cost of leasing these programs...
In the case of your breach of this license agreement, PC Cyborg reserves the right to take legal action necessary to recover any outstanding debts payable to PC Cyborg Corporation and to use program mechanisms to ensure termination of your use...
These program mechanisms will adversely affect other program applications...
You are hereby advised of the most serious consequences of your failure to abide by the terms of this license agreement; your conscience may haunt you for the rest of your life...
and your [PC] will stop functioning normally...
You are strictly prohibited from sharing [this product] with others..."

Here is the full version:

EULA from the AIDS information diskette

Luckily the program used trivial encryption and soon a decryption tool was written by Jim Bates and given away for free. He also wrote up his analysis of the Trojan (the term Ransomware didn’t exist in 1989).

An arrest warrant was issued by New Scotland Yard and Popp was eventually arrested at Schiphol airport in Amsterdam during a routine baggage inspection.

From that date his behaviour became very erratic; he was held in Brixton prison until he was due to go to appear at court. There have been reports that he was known to wear a cardboard box whilst in prison, and that when he finally appeared in court, that he had curlers in his beard and a condom (prophylactic) on his nose, allegedly “to ward off radiation”. Whatever the real state of his appearance in court, he was declared “mentally unfit to stand trial” and returned to the United States without charge.

Other researchers (Yung and Young) analysed the Trojan in more detail and wrote a paper on it (in 1996) pointing out its many flaws, but the major one was that is used Symmetric (single key) encryption rather than Asymmetric (Public Key Cryptography, that uses two keys, a Public and a Private key). Most modern Ransomware uses the latter, and this means that unless you have access to the Private key, you can’t decrypt the encrypted data (unless the encryption methodology used is not properly implemented).

The Rebirth…

Not surprising, the Bad Guys n Girls were taking notes, and in the early Noughties we saw the re-birth of (or birth of modern) Ransomware. Of course it used Public Key Cryptography (PGP/GPG). Some of the early new versions were named PGP or GPGCoder. However, the problem was how to get the money from a victim without being caught or unmasked (always a tricky issue for any extortionist or blackmailer in the days before cryptocurrencies existed).

We saw a small (compared to the explosion that was to follow) number of these new Ransomware, but all was about to change in 2009 with the first launch of a little cryptocurrency called Bitcoin (invented in 2008).

It took a few years for the cyber-criminals (the Bad Guys n Girls) to catch on to the value of Bitcoin as a method of payment for Ransomware and other crimes, but by around the start of 2013, they had started to embrace Bitcoin and Ransomware exploded over the next 4-5 years. The first modern Ransomware that took full advantage of not only Public Key Cryptography, but also Bitcoin was known as Cryptolocker. Many saw the success of this malware, and promptly developed their own Ransomware strains.

The Business

Once Cryptolocker had arrived, Ransomware quickly became a thriving way to make money for the Bad Guys n Girls. Estimates appeared that claimed that in 2015 Ransomware netted (according to the FBI) over $24 Million USD, in the first three months of 2016 this had grown to over $209 Million USD, and Kaspersky claimed that Ransomware attacks tripled in 2016. Things just got worse in 2017 as we saw the first Worm-enabled Ransomware (which can move from system to system without human help). 2017 is remembered for two major Ransomware attacks, Wannacry in May, and then NotPetya in June (both Worms). The problem with NotPetya was although it acted like Ransomware, it was in reality a wiper, so even if you paid up, you wouldn’t get your data back!

According to Cybersecurity Ventures, they predict that Ransoware will cost $6 Trillion USD annually by 2021.

But read on dear reader, things are about to change, in 2018!

The Future?

As mentioned previously things were about to change in 2018 (actually from the last quarter of 2017)…

During 2018 we saw the number of Ransomware attacks shrink, but the average Ransom being charged increased (significantly), why?

  • The Bad Guys and Girls moved to a more targeted approach, often manually hacking an organisations infrastructure, mapping out there network, and then encrypting the organisations “crown jewels”. Often part of this mapping would identify where the backups were and these would either be erased (securely) or encrypted too. They started to look for high value targets, rather than use the previous scatter-gun (mass-mailing) approach they had used during 2015-2017.
  • Writing Ransomware is not trivial (if done properly), so the Bad Guys n Girls were also looking for other ways to monetise vulernable systems (ones they can hack, either manually or via an automated script). They decided to steal the processing power of compromised systems to “mine” cryptocurrency. Less work, less risk and more profit; it was a match made in heaven!

I blogged about the “Curse of Cryptojacking” recently.

However, I don’t think we have seen the back of Ransomware, the Bad Guys n Girls may have moved on to Cryptojacking and Sextortion scams, however, they will continue to hold data and systems to ransom where the payout is worth the effort. Increasingly this means Public Services (Government), Healthcare, Education, and Law Enforcement (including Law firms), as well as the more traditional targets (Retail, Travel, Finance, etc.)

Update March 20th: Ironically less than 24 hours after I posted this blog, Norsk Hydro was hit by manually deployed Ransomware (in this case is was LockerGoga) which uses the same approach as other manually deployed Ransomware (such as SamSam); the victims infrastructure in penetrated via a vulnerability or insecure open port, and the Bad Guys n Girls map out the network and then deploy their Ransomware personally.

Protection?

  • Harden and patch all systems, applications and Cloud infrastructure.
  • Use unique passwords for all access; even better use two or multi-factor authentication (not SMS based).
  • Install and run anti-malware, end-point/server protection, and on servers enable and configure the firewall and if it is a web server protect it via a Web Application Firewall too.
  • Remove all default accounts and sample content on web and database servers, etc.
  • Close off ports for remote administration, or put them behind a VPN. That includes RDP (Terimal Services), Telnet, SSH and others
  • Stay aware of new threats and countermeasures, both specific and generic.
  • Train and test your staff; they are often the first and last line of defence.
  • Take BACKUPS, and store them physically off-site (not in the Cloud), and test that they work (do a RESTORE). That way you have the option to recover your systems and data without having to pay the Bad Guys n Girls.
  • If you are using O365 or GSuite enable 2FA/MFA and do NOT allow the services to be accessed via IMAP or POP3, as this will bypass Multi-Factor Authentication (you have been warned!)
  • If you have cyber or crime insurance, check that Ransomware is covered by the policy (most cyber insurance policies currently do cover this, but Property and Casualty policies usually don’t)…

Until next time, stay safe out there!

Effective End-User Training, Compliance and Testing

What do most staff think when they hear the words “end-user security training” or “security awareness training“?

They think, “Oh no, is it really that time of the year again? What a waste of my time; it is so boring and doesn’t teach me anything that is useful to me. Security is the IT department’s problem/job, not mine!

In many organisations security awareness training is dull, impersonal and does not use “real life or real world” stories to add colour and flavour and help explain the problem, the risks, and the impact of security breaches/incidents. In most cases the training is to read a policy document (Internet Usage Policy/Security Policy, etc.) or to watch a video or attend a webinar where they are preached to rather than being allowed to participate in an interactive or interesting session.

Staff need to understand that in today’s world, security is everyone’s job, because if your staff are not part of the solution, they are part (if not most*) of the problem!

[*] 95% of successful cyber attacks are the result of a phishing scam.
Source: (2017) Ironscales,Email Security Report.

Add to this that many staff treat end-point protection (anti-malware, personal firewall and related security tooling) as an “authentication” method; “if I can open this link/file in the email, go to this site, etc. and my system gets hacked/infected, it is not my fault, it is the security/IT departments fault!” This is captured very nicely in this cartoon.

Given the above perceptions of many staff/end-users, what can we do to try and reverse this situation, so that staff see security as part of their job/responsibility and become part of the extended security team?

What do you need to make end-user security training successful, rather than something that is hated/despised/loathed and avoided at all costs for as long as possible by most staff in almost every organisation?

Here are some top tips:

  1. Make it fun; use gamification, where they are engaged, entertained, involved and tested throughout each module.
  2. Keep it short and punchy; no longer than 20 minutes, backed up with bite-size (5 minute) modules to reinforce an individual topic/threat. Don’t try and do the whole organisation at the same time; do it in groups and stagger the roll-out to be more effective.
  3. If you can make it a competition; who can report the most spam/scams/phishing emails, etc. Give prizes, or at least recognition!
  4. Make is personal; teach them skills that they can use in everyday life, including at home.
  5. Phish your own staff (after training them, and before) so that you can gauge the effectiveness of the training, but do it wisely and sparingly as otherwise they will quickly become fatigued and disinterested.
  6. Don’t penalise those that fall for the phishing test emails; use this instead as a “teachable (not preachable) moment“, rather than shame or blame them, try to understand why they fell for it, and explain how they could have recognised it for what it was.
  7. Make sure you set-up an email address such as: “[email protected] which can be used by employees when they suspect they have received a phishing email. Explain what steps they should take in order to report the email and give them with the necessary tools/guidance to report a suspected phishing email, such as a “report-phish” button in their email program.
  8. Training is not a one-time or once a year thing; good awareness training is part of the culture of an organisation and needs to be topped-up and refreshed all the time to stay effective. Make sure all staff, from the C-Suite down to the most junior staff in the organisation are included, not just techies.
  9. Ask for feedback, especially ask them about what they are worried about, e.g. Ransomware, Scams, Sextortion, Social Networks, Privacy, Passwords, GDPR, Data Breaches and how it impacts them personally and the company/organisation/industry, etc.
  10. You could always bring in a real-life “hacker” (an Ethical one, also known as a Penetration Tester or White Hat Hacker) and let them talk to your staff and answer their questions; they will have lots of real-world stories and good advice. T here are some that are good at talking to non-techies without resorting to acronyms and technical jargon.  These rare individuals will use humour, analogies and stories to help illustrate and bring the subject to life; they will often be very passionate about security, and this will keep the audience engaged.

However, you will find that 10-20% of your staff will just not be trainable (from a security awareness perspective)and you need to identify them and work on ways to reduce the risk that they pose to your organisation.

As the old saying goes:
The Bad Guys n Girls only have to get lucky once;
the Good Guys n Girls have to be lucky all the time
“.

So, what is a good solution that isn’t going to break your budget, but still allow you to deliver most of the above as a managed service and tie in to your Active Directory do that you can assign training to groups or individuals and see the results (meta data) from the training and testing?

One vendor that I have found to be very effective in this space is Techguard Security, this is what they say about their offering:

“Empowering your workforce to recognize and respond to sophisticated threats is only a click away. TechGuard S.H.I.E.L.D is a cutting-edge and comprehensive training solution for businesses of all sizes.”

You can use the following link to find out more about Techguard and their offerings, including the end-user training and phishing testing offerings, and what’s more, if you decide you like what you see and sign-up with them, you will get 10% off the price!

To find out more and claim your 10% discount when you sign up, use this unique web link: https://www.techguard.com/omg-cyber-security/

If you don’t use that link to register your interest, you won’t get the discount when you sign up.

Don’t just take my word for the effectiveness of good Security Awareness training, here are some statistics:

  • According to research by Ponemon, even the least effective training programmes have a 7-fold return on investment.
  • Most cybersecurity training programmes result in a 37-fold return on investment.
    Source: (2015) Maria Korolov, Does security awareness training even work?

If you don’t train your staff and carry out phishing tests, the Bad Guys n Girls will, and the results won’t be pretty…

I have been doing security for over 30 years and I often state “The day I stop learning will be the day they bury me“, in other-words, I’m still learning and will continue to do so until I die.