On February 4, 2021, the Michigan Marijuana Regulatory Agency (MRA) issued announced that there had been recent social engineering attacks against MRA licenses. The MRA informed marijuana businesses about incidents of fraud or attempted fraud and common themes of this include:
Social engineering is the art of manipulating people in an online environment, encouraging them to divulge—in good faith—sensitive, personal information, such as account numbers, passwords, or banking information. Social engineering can also take the form of the "engineer" requesting the wire transfer of monies to what the victim believes is a financial institution or person, with whom the victim has a business relationship, only to later learn that such monies have landed in the account of the "engineer."
If you think that this type of scenario won't happen to your organization...think again. This type of fraud happens every day and is surprisingly successful. Over 100,000 people are impacted by social engineering attacks every day!
What types of social engineering should my business watch for?
Unfortunately, malicious actors are preying off of human psychology to compromise their target and their information. It is very important for businesses to speak openly and often with their employees about signs and care of sensitive information. The best solution is a multipronged approach including training your employees, monitoring security policies in place and protecting your business with a Cyber and Data Breach Liability policy.
First off, any business that collects personal data faces substantial liability in the event of a breach. In a blog from Carolyn H. Rosenberg and J. Andrew Moss of Reed Smith, they stated:
"Given the vast amount of information that cannabis retailers and distributors are required by law to collect from customers, coupled with the fact that this is a new and rapidly growing industry operating in an uncertain regulatory environment, the unfortunate reality is that those in the cannabis business may be prime targets for cybercrime. As cyberattacks become more sophisticated - including recent threats that cybercriminals will publish data stolen from victims who refuse to pay ransom - cyberliability insurance coverage is one risk management tool that cannabis companies should consider as a part of a comprehensive security and privacy breach response plan. Cyberliability policies continue to evolve, and thus they may be negotiable and can (and should) be customized wherever possible."
Plus, it is very important to note that most general liability insurance policies will not cover your business for the growing list of cyber exposures. Some may provide limited crime or cyber coverage but it is not the type of comprehensive coverage needed to manage a data breach and protect your assets.
Data is becoming increasingly more valuable every year and catastrophic events like the pandemic only amplify these tactics. That is why Spire Insurance Solutions has partnered with the top cyber and data liability experts to provide multiple solutions to businesses. The cannabis industry continues to be unique with only certain companies willing to underwrite the exposure. Our team understands the important steps your business should implement or improve on to protect this valuable data. Then, if the unimaginable happens, the right cyber liability coverage will jump in to not only minimize your losses and disruption but manage the crisis to the end.
Our cannabis cyber liability solution is designed specifically for dispensaries, cultivators, breeders, extractors, manufacturers, BPO service providers, etc. These policies offer many liability limits and options with premiums ranging from $5,000 - $10,000+ depending on sales and exposures. Contact us today to get started!
This Blog/Web Site does not provide insurance or legal advice. This site is for educational purposes only as well as to provide you with general information and a general understanding of insurance, not to provide specific legal advice or specific contract advice. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute a client relationship.
The information on this Blog/Web Site is not intended to be a substitute for professional insurance or legal advice. Always seek the advice of a licensed agent in your state pertaining to insurance and legal issues.
Author: Tyler Bartosh
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