Cyber Risk

Doxing: Are You Prepared?

When hackers steal data and publish it online, the financial and reputation repercussions can be severe.
By: | September 30, 2015

Cyber insurance experts have warned corporate risk managers to expect more so-called “organizational doxing” attacks, such as those recently suffered by Ashley Madison and Sony.

In a doxing attack, hackers steal sensitive personal or corporate information, then publish the information online.

“Employees are a company’s weakest link.” —Alessandro Lezzi, team leader and underwriter, international technology, media and business service, Beazley

Doxing hacks can be perpetrated by corporations or state-funded organizations seeking to disrupt a company’s business, or by cyber gangs seeking to extort money under the threat of publishing data. In the case of Ashley Madison — an adultery dating website whose members’ details were leaked online — the motive for the doxing attack appears to be based on moral grounds.

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Regardless of the reason, the financial and reputation repercussions for victims can be severe. Three Ashley Madison customers whose details were exposed have since committed suicide, and the company now faces a class-action liability suit from scores of clients.

“If someone is motivated to take down a competitor, one way they might do it is hacking that competitor and posting confidential information as a form of corporate warfare or espionage,” said Sarah Stephens, partner and head of cyber, technology, and media E&O at broker JLT.

The methods used by doxing hackers to steal the information are essentially the same as used in phishing or whaling scams, typically relying on employees responding to a fake email infected with malware.

According to Alessandro Lezzi, team leader and underwriter, international technology, media and business service at Lloyd’s underwriter Beazley, senior executives are most at risk of being targeted, as hackers may use embarrassing personal details against them to extort money, as well as potentially hacking sensitive corporate information from their email accounts.

“Our advice to clients is that 100 percent security is unobtainable, so this could happen to anyone,” Lezzi warned. “Companies are coming under attack all the time, and it only takes one to get through. The most important risk management objective is to be ready.”

“Our advice to clients is that 100 percent security is unobtainable, so this could happen to anyone.” — Alessandro Lezzi, team leader and underwriter, international technology, media and business service, Beazley

It is vital, he said, that companies put crisis response plans in place to allow them to minimize the fallout of a potential doxing breach. These plans can often be developed with the help of insurers and brokers, and a response service is usually included in specialist data breach policies.

“The forensic, legal and crisis management services offered under insurance policies in the wake of an attack often mean more to the client than the cover itself,” said Lezzi.

“You need a lot of coordination as fast as possible between the different departments within a company. Lots of people need to be involved — from compliance and legal to IT to crisis management — and the plan needs to have been tested.”

Insurance Solutions

While broadly worded cyber policies should cover the cost of crisis management and forensic investigation, as well as any liability claims that arise from the data breach, Stephens said, it may be hard to quantify the financial impact of the leaking of sensitive corporate data or information that may damage a company’s business or reputation.

The financial impact of a cyber attack is “a very difficult loss to value, and that’s why many insurers shy away from it.” — Sarah Stephens, partner and head of cyber, technology, and media E&O, JLT

“The insurance industry hasn’t done a great job of creating broad coverage for financial losses stemming from this kind of risk, although there are some products out there — primarily in the Lloyd’s market — that do address future lost revenue or immediate loss of attraction in the few months after a data breach,” she said.

This coverage, Stephens said, is often very carefully worded and requires certain triggers to be met within a short indemnity period.

“But it’s a very difficult loss to value, and that’s why many insurers shy away from it,” she added. “You could argue, for example, that Target’s disappointing performance in the quarter immediately following its data breach may have had as much to do with a failed expansion into Canada as the breach itself.”

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Stephens and Lezzi both said the frequency of doxing attacks is likely to increase, and while it is virtually impossible to make a company’s network impregnable, the most effective form of defense is to educate staff on the evolving risk of cyber-attack.

“Employees are a company’s weakest link,” Lezzi said. “You’d be surprised how many employees fall for phishing emails — one client was tested with a fake scam and 50 percent of employees responded to the email,” he said.

“It is important to train employees about this type of attack and how to manage confidential information. They also need to be taught what to do and who to speak to in the event of an attack.”

Antony Ireland is a London-based financial journalist. He can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]