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Remote Working Vulnerabilities Hit School Hard

The CFC case study below explains how hackers accessed a school’s systems through remote desktop protocol and held data to ransom.

The education sector is no exception to the massive technological changes that have occurred over the past 20 years or so. Schools in particular are now increasingly dependent on their computer systems to provide students with a 21st century education. Both teachers and students now regularly make use of computer technology in the classroom, whether that be through delivering PowerPoint presentations on interactive whiteboards, conducting interactive learning on tablets and laptops, completing online assessments and tests, or using software programs for compiling student grades and monitoring classroom attendance. Schools are also seeing a shift away from paper filing and are storing more and more of their important data in an electronic format.

Although the use of computer technology has undoubtedly brought many benefits to schools, their increasing dependence on computer systems and electronic databases also makes them vulnerable to cyber losses. If teachers and staff are unable to gain access to their computers, whether that be as a result of a malicious cyber attack or a non-malicious system failure, it can result in serious operational disruption for the school. And if a hacker gains access to sensitive electronic data held by the school, it could have a negative impact on the school in terms of both its finances and its reputation.

One of CFC policyholders affected by a cyber loss was a private school responsible for educating approximately 800 students aged 11-18, with the school catering for both day and boarding students.

The incident began when a hacker managed to gain access to the school’s computer systems through the remote desktop protocol (RDP). RDP allows remote users to connect to the desktop of another computer through a network connection and is typically used by schools to allow staff and students to access their networks whilst they are not on school premises. In this case, the port that the school used for RDP access was exposed directly to the internet. Hackers are constantly using scanning tools to identify vulnerable organizations and establish any weak points that they may have in their cyber security, and an RDP port that is exposed directly to the internet is one of the most common that they look out for.

Having identified this area of weakness, the hacker looked to gain access to the school’s network by initiating a brute force attack against a local administrator account. A brute force attack is where a hacker uses a computer program to crack passwords by trying numerous possible password combinations in rapid succession, with the program typically trying a long list of the most commonly used passwords. Generally speaking, the longer and more complex the password, the more difficult and time consuming it is for the program to crack. Unfortunately, however, the school’s local administrator account had a weak password in place that had been used as a default but never been changed. With the password lacking in complexity, the program quickly cracked the password. What’s more, the school did not have multi-factor authentication enabled for RDP access, so as soon as the password was cracked, the hacker was able to gain access to the school’s network without having to go through a second verification procedure.

Upon gaining access, the hacker took the opportunity to unleash ransomware across the school’s computer systems. Ransomware is a type of malicious software that works by encrypting data on a network, and then demands that a ransom be paid in exchange for a decryption key to regain access to the data. In this case, the ransomware had encrypted multiple servers, effectively locking the school out of its computer systems, and the hacker demanded a payment of 2 bitcoin for the decryption key. In many cases, it’s possible to mitigate ransomware attacks by recovering from back-up. However, the school’s back-ups were contained on one of the servers encrypted by the ransomware, rendering them useless.

Fortunately for the school, the ransomware attack occurred over the course of a school holiday, but without being able to restore from back-ups, the school recognized that a great deal of disruption would ensue if its computer systems were still unavailable once students returned. For example, the school would be unable to have ready access to highly important information, such as the financial information needed for accounting purposes, details about prospective students for the next school year and critical information about students under the school’s care, such as medical records and dietary requirements;  teachers would be unable to make use of interactive whiteboards to provide presentations to students; students would no longer be able to use e-learning courses in the classroom or complete online assessments; and boarding students would be unable to complete homework assignments on schools computers in the evening.

With the prospect of significant operational disruption looming over the school, it was at this point that the incident was notified to CFC’s incident response team. The team’s first priority was to establish what ransomware variant had been used in the attack by looking at a copy of the ransom note and a sample of the encrypted files. Having identified the likely ransomware variant, the team then carried out some research to see if there was any way of removing the ransomware without paying the ransom demand. One of our incident response partners produces a regularly updated list of freely available decryption keys for known ransomware variants. Luckily for the school, the team were able to find a decryption key online. With the decryption key to hand, the school was able to begin the process of decrypting the affected data and applications without having to pay the ransom.

However, even though the school had managed to regain access to its computer systems, there was still a question mark over whether the attack had resulted in a data breach. The ransomware attack had impacted servers containing sensitive data, including parents’ names, phone numbers, and residential addresses; data on past and present students, such as grades, attendance, disciplinary and medical records; information on staff, such as contact details, addresses and bank account details; and information on prospective students who were likely to be inducted in the next school year. As the school was subject to local data breach notification laws, it meant that if it transpired that some or all of this data had been accessed or exfiltrated in the course of the attack, the school would have to notify the affected individuals, potentially resulting in a regulatory investigation and damaging the school’s reputation in the eyes of staff, students and parents alike.

In order to address this issue, we engaged one of our incident response partners to conduct a forensic investigation to establish how the hacker had gained access to the insured’s computer systems and whether they had accessed any sensitive data whilst they were there. Unfortunately, when the hacker had carried out the attack, they had set up a temporary user profile, which meant that there was no way of knowing for sure what folders the hackers may have explored and what files may have been opened.

Nevertheless, our incident response team and our forensic partners were able to establish some pertinent facts about the case. First, based on previous incidents and threat intelligence, the ransomware variant used during the course of the attack was not known to be capable of accessing or exfiltrating data. Second, the bandwidth usage logs obtained from the school’s internet service provider did not show high levels of traffic during the period that the hacker had access to the school’s computer systems, indicating that there had not been any major data exfiltration from the school’s network. Third, the hacker was only logged on to the school’s computer systems for a short period of time, suggesting that they were primarily focused on deploying the ransomware rather than seeking out sensitive data.

Given this, our forensic partners determined that the hackers main motive appeared to be financial gain through the use of ransomware, rather than the theft of sensitive data. After engaging legal advice to determine whether a data breach notification would be required, the lawyers advised that, based on the findings of the forensic investigation, no notification would be needed in this instance, thus ensuring that the school’s reputation was not damaged unnecessarily.

The total cost of carrying out a root cause analysis, network security assessment, forensic investigation and engaging legal counsel came to £17,560, all of which was covered by the school’s cyber policy with CFC.

This claim highlights a few key points. Firstly, it highlights the importance of securing the remote desktop protocol (RDP) effectively. If organizations are using RDP, they should make sure that it is not directly exposed to the internet and use a virtual private network (VPN) instead. In addition, businesses should ensure that they have good password hygiene in place and enable multi-factor authentication for any remote access to the network. If the school had had these measures in place, it is highly unlikely that the hacker would have gained access to its computer systems.

Secondly, it highlights the importance of having a good data back-up policy. In this case, the school had been prudent enough to back up its data. However, by not saving these back-ups external to the school’s servers, it meant that when the ransomware started encrypting, it encrypted the back-ups too. Ideally, businesses should maintain daily offline back-ups to help prevent back-ups from being compromised during the course of an attack.

Finally, this claim highlights the value of cyber insurance. When you buy a cyber insurance policy, you are not just buying a promise to pay valid claims. You are also paying for a service to help and advise you when things go wrong. In this case, CFC’s incident response team and our partners were able to provide threat intelligence on the ransomware variant and obtain a free decryption key, enabling the school to regain access to its computer systems; conducted a root cause analysis to establish how the hacker got into the system, enabling the business to identify and remedy any cyber security weaknesses; and conduct a forensic investigation that allowed us to determine that the ransomware attack had not resulted in a data breach, thus preventing the school from conducting an unnecessary notification procedure and needlessly damaging its reputation.

Source: cfcunderwriting.com


Cybercriminals Exploiting Coronavirus

Public concern and working-from-home mandates are providing opportunities for cybercriminals.

This CFC advisory provides some background on these risks along with some easy-to-implement steps that businesses can follow to avoid falling victim.

COVID-19 increasingly being used in phishing attempts

As new cases of the COVID-19 Coronavirus continue to be reported daily, cybercriminals have been leveraging the situation to take advantage of those looking for information on the outbreak. Scams include the following and are changing each day:

  • The Sophos Security Team has spotted emails impersonating the World Health Organization (WHO). The emails ask victims to “click on the button below to download Safety Measure”. Users are then asked to verify their email by entering their credentials, redirecting those who fall for the scam to the legitimate WHO page, and delivering their credentials straight to the phisher.
  • Interpol has warned of a large increase in fraudulent websites claiming to sell masks, medical supplies and other high demand items that simply take money from victims and never deliver the promised goods. It is advisable that internet users purchase items only from established and reputable sources.
  • There have been reports of airlines and travel companies being impersonated by fraudsters in a bid to either obtain sensitive information, like passport numbers, or install malware on victims’ computers. They may say they want to advise you of COVID-19 infected passengers on past flights you’ve taken or offer discounts on future flights. When in doubt, we advise users to be vigilant when clicking on any links, delete any suspicious emails, and not disclose sensitive information if you are approached unexpectedly.
  • Fraudsters are also developing fake charitable donation campaigns which claim to help individuals and communities impacted by the Coronavirus. Any money donated is sent to fraudulent accounts. Again, if you are wanting to support relief efforts, make sure to research the organizations you are looking to donate to.
  • A Twitter user has identified another malware campaign purporting to be a “Coronavirus Update: China Operations”. The emails have attachments linking to malicious software.

As global concern about the coronavirus grows, it is likely that threat actors will continue to abuse this outbreak to their advantage.

Increased remote working can open gateway to hackers

Remote desktop protocol (RDP), when set up correctly, is a great tool for remote working. However, using it without multi-factor authentication (MFA) enabled or on an insecure network can open the gateway to hackers. In fact, in 2019, 80% of the ransomware attacks we handled were initiated through RDP.

Businesses that start using RDP for remote working during the outbreak should be aware of some of the cybersecurity risks it can pose and ensure it is being used securely. Employees should always log on within a trusted network and ideally work with their IT department to secure personal devices – and implement MFA – prior to remote working.

CFC recommendations

We suggest implementing the following steps to bolster security:

  1. Test remote log-in capabilitiesNot only should personal devices be configured for secure remote working, but business should ensure that multi-factor authentication (MFA) is set up immediately. MFA is an authentication process that requires more than just a password to protect an email account or digital identity and is used to ensure that a person is who they say they are by requiring a minimum of two pieces of unique data that corroborates their identity. Implementing this significantly reduces the chances of cybercriminals being able to log into a business’s RDP. For more information on MFA and how to implement it, click here.
  2. Train your employees on how to spot a phishing emailAs a CFC cyber policyholder, you can get free access to a range of risk management tools, including CyberRiskAware, an e-learning tool focusing on phishing attacks. This valuable tool teaches people within your business to be more vigilant when in comes to opening attachments, clicking on links, transferring money, or sending sensitive information. To find out more about it, including instructions on how to access it, click here.
  3. Prepare for operational disruption in advancePut simply, prepare for the worst. As with so many cyber incidents, time is of the essence so ensure you have an incident response plan in place, a template for which you can access for free as a CFC cyber policyholder. And as ever, if you believe that one of your employees has fallen victim or that you are experiencing any kind of cyber event, notify CFC as soon as possible so that we can help you.
  4. Finally, be vigilantWhat’s becoming clear as this pandemic plays out is that cybercriminals are shifting tactics daily. If you see something on social media or receive an unsolicited email that seems too good to be true, it probably is. Aside from learning how to spot phishing emails, make sure to do your research, use reputable companies, and follow-up requests for money or information with a phone call using a number from a separate, trusted source.

Source: www.cfcunderwriting.com


A Message on COVID-19

We want to take a moment and extend our well wishes to you and your families. As the growing concern around the spread of corona virus (COVID-19) is on all of our minds and everyday business functions are being challenged, ABEX is committed to working with our brokers to provide the best service we can under the circumstances.

The well-being and safety of our employees and our communities are our top priorities, so all of our employees currently work from home. As the situation unfolds, we will be monitoring recommendations from national health authorities and making adjustments as necessary.

Business as usual

  • We’ve invested in our infrastructure so that all of our staff are equipped to connect remotely into our secure network and continue to provide seamless service to our clients.
  • Our staff continue to be available via email and phone as most of our underwriters’ extensions are routed to their cell phones.
  • General voicemail is being monitored and emailed to respective recipients.

Possible delays

  • We will endeavor to remain operating to service our obligations, but our service may be delayed due to circumstances outside of our power.
  • A number of our UK partners are in the same situation so this may cause additional delays.

Broker payments

  • We continue to receive mail and ICS courier so please continue sending in your payments.  Please do not use other courier services beside ICS as we cannot receive those at this time.
  • We encourage our brokers to use / sign up for ClearPay which is the safest and most productive way of making a payment.
  • We accept EFTs and e-transfers, but please note that e-transfers are not as safe as the above methods as they can get intercepted. Please contact accountsreceivable@abexinsurance.com for our EFT information.

Open market placements

  • If you are having difficulty collecting payments for open market placements please reach out to the underwriter on file or if unsure, contact us at service@abexinsurance.com and we will work with our syndicates to extend premium payment conditions.
  • For open market policies needing extensions, please ensure you give us enough notice, so that we can communicate to syndicates.

Renewals

  • Please ensure you give us enough notice on any changes so that we can communicate to syndicates accordingly.

How to Contact Us

Please go to our Contact Us page for more information on how you can reach us.

Thank you for your patience and understanding and please do not hesitate to contact us with any questions.  Stay safe and we wish you the best as we navigate through these challenging circumstances.


How to Stay Safe Online

The last couple of years has seen a surge in cyber events affecting businesses of all sizes. With the growing volume and sophistication of online threats like viruses, ransomware, and phishing scams, it’s important to know the proper practices to stay safe online.

From paying attention to browser warnings to being mindful of app permissions, a few small changes can make a big difference when it comes to cybersecurity. That’s why CFC’s in-house cyber claims and incident response team has assembled this handy infographic, which contains oodles of easy, actionable tips on things you can do – today – to become more secure.

Click here to download the full infographic below.

Source: www.cfcunderwriting.com


Climate Change Litigation and D&O Insurance

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With climate change firmly at the top of the news agenda, companies with large carbon footprints are under pressure to dampen their impact on the planet.

Growing concern has led to an upsurge in the numbers of litigation cases centered on companies’ disclosures related to their potentially harmful practices, with lawsuits against companies alleging misleading statements regarding their environmental practices and commitments.

Litigation has, so far, focused primarily on energy companies and big-name polluters, but it’s not beyond the realm of imagination to expect manufacturers and other greenhouse gas emitting organisations to come under scrutiny, too.

Here’s what you need to know about climate change litigation and D&O insurance:

What could climate change litigation mean for businesses? 

Companies are under pressure to lessen their environmental impact, and any disclosures they make relating to their greenhouse gas (GHG) emissions and environmental exposures are being scrutinized more than ever before – boilerplate disclosures are not acceptable. Any challenges made to such disclosures can lead to expensive and high-profile lawsuits, as seen with ExxonMobil, 3M and Australia’s Commonwealth Bank.

Companies should also be mindful of the rise in remediation suits, similar to the ones brought by the State of Rhode Island and Cities of San Francisco and Oakland. These entities sought damages from energy companies to repair and rebuild coastlines as a result of rising tides brought about by climate change, for which these companies were deemed responsible. With the nationwide cost of building new or rectifying existing seawalls estimated at over $400 billion, companies may well find themselves caught in a storm of defending wave after wave of liability lawsuits.

But this litigation only concerns energy companies, doesn’t it?

Not exactly. While litigation has focused primarily on energy companies, this doesn’t mean that other industries are safe. Essentially any company that emits greenhouse gases could be in the firing line – like transportation companies, agricultural businesses or businesses that manufacture products that emit GHGs. Even financial institutions. In fact, Barclays recently came under shareholder pressure to reduce its investments in fossil fuel companies, and many of the big banks have notably declared their intentions to curtail investments and loans in the fossil fuel sector.

To settle or fight: What happens in climate change disclosure cases?

Now that the world’s leading GHG emitters are showing a desire to adapt and change, any company found guilty of not pulling their climate change “weight” would suffer considerable reputational harm. When cases like this are taken to court it can prove expensive and timely. Large corporations like ExxonMobil can clear their name, but this is not always true for smaller companies which may be constrained by their financial means. Not every business can afford a protracted and expensive trial to prove their innocence.

Companies that settle out of court may find this to be a quicker, cheaper or less disruptive route, but with no admission of guilt, question marks tend to hang over what might have been the outcome had the case gone to trial.

Are current D&O insurance policies likely to respond to climate change litigation?

Aside from the bespoke terms and conditions set out in your standard D&O insurance policy, there are a few exclusions which (depending on how they are negotiated) could come into play when dealing with climate change litigation:

  1. The conduct exclusionThis excludes claims arising out of the gaining of financial advantage, personal profit or by committing a fraudulent act or omission. The latter is the most pertinent here as plaintiffs may allege that a company’s directors and officers knowingly disclosed false or misleading information about their climate change statistics. Policies, however, would likely still look to defend the accused against these allegations during the litigation process, but if a guilty verdict was issued, then the exclusion would be brought into play.
  2. The pollution exclusionThis exclusion typically excludes claims relating to the discharge or release of ‘pollutants’. The language of this exclusion will differ policy to policy and the decision as to whether any substance released, discharged or dispersed by an insured can be defined as a pollutant will be a matter for interpretation. Other factors to consider will be if the language in the exclusion is the ‘absolute’ version or the softer ‘for’ language version or if the exclusion provides securities or non-indemnifiable claims carve-backs. It is, however, worth noting however that on a D&O policy, loss will not extend to clean up costs.
  3. The bodily injury / property damage exclusionThis looks to exclude claims involving damage to property and bodily injury, death and mental anguish. Depending on the policy, this exclusion might include ‘absolute’ language or the softer ‘for’ language and may include non-indemnifiable or securities carve-backs.

How can policyholders protect themselves?

It’s crucial that businesses maintain adequate levels of D&O insurance and environmental liability insurance. The size of the limit should be a consideration, as should the terms and conditions of policies. Additionally, companies need to take proactive steps to reduce emissions and/or by becoming ‘greener’.

For boards of directors this might mean the nomination of a board member or establishment of a separate committee with clear responsibility for the company’s climate change objectives.

For energy companies, diversifying into cleaner energy or investing capital into negative emissions technology would strongly help in placating go-forward concerns.

Other steps might be to review fossil fuel operations and/or set emissions targets – Rio Tinto, for example, has put a stop to its coal mining operations altogether, while the world’s largest shipping company Maersk has committed to net zero emissions by 2050 (per Climate Action 100+’s progress report). Working with organizations such as the Institutional Investor Group for Climate Change, or Climate Action 100+ would show a further commitment to achieving their objectives.

What impact will climate change cases have on D&O insurance rates?

We may see an increase in the cost of D&O insurance on a case by case basis, but it’s more likely that insurers will be looking to mitigate exposures via exclusionary language, unless they are entirely confident in a company’s eco-friendly credentials.

Every move and declaration made by these companies will be under scrutiny, so any perceived inaction, false statement or dragging of heels will likely bring about a fierce reaction from investors, lobbyists, social movement organisations and government bodies alike. Should this ultimately turn into litigation, companies will likely incur sizable legal costs – whatever the outcome of the litigation.

Source: www.cfcunderwriting.com


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