By Max Meade, for Elevated Nation
MJ Freeway, who is one of the leading Software Companies and helps dispensaries track sales and inventory along helping prepare regulatory paperwork for over 1,000 clients across the country, suffered a hack early this year that left large amounts of data corrupted and had caused some of their Dispensary customers to leave and go with their competitors. Over a week after the hack occurred, MJ Freeway was still struggling to recuperate from the hack on their system and continued to lose customers to competing software platforms.
This unfortunate cyber-attack is a reminder of how dependent the Cannabis Industry is on technology and how vulnerable that leaves businesses to an attack of this nature.
What are the chances that this happens to my business?
A study done in April by the Cybersecurity firm Symantec says that “cyber-thieves have been increasingly targeting small businesses over the last four years. Cyber hackers view small businesses as a soft, easy mark versus big blue chip companies which have ramped up their cyber firewalls” and that “almost half of cyber-attacks worldwide, 43%, last year were against small businesses with less than 250 workers”. These statistics are staggering and will continue to rise as technology continues to advance and hackers find stealthier ways to infiltrate businesses systems.
With most Cannabis Businesses falling into the “Small Business” sector, this only heightens the threat of a Cyber Attack and reiterates the importance of protecting your business from a this type of attack.
So if I have Cyber Coverage, what will it protect?
Cyber Coverage is designed to protect you against liability and expenses arising from the theft or loss of data along with a breach of data security of privacy. It is designed to be a combination of the following 4 components:
- Errors and Omissions: This covers claims arising from errors in the Performance of your services. This includes technology services, like Consulting and Software, or more traditional professional services like Consultants, Architects, Engineers, and Lawyers.
- Media Liability: This includes advertising injury claims such as infringement of intellectual property, copyright/trademark infringement and libel/slander. This used to be included on the General Liability policy, but due to the presence of the Internet for business today it has transitioned to being covered through a Cyber policy or in some cases a stand-alone Media Liability Policy.
- Network Security: Having a failure of your Network Security can lead to many different issues, included destruction of data, cyber extortion, consumer data breach, or transmitting a virus. This also applies for any trade secrets or patents that are accessed due to a failure of your security.
- Privacy: A Privacy Breach doesn’t necessarily have to involve a network security failure. This can occur from a breach of physical records, human errors like throwing away the wrong files or losing a laptop, or even returning a piece of equipment that still contains customer information (ex: returning a photocopier and the hard drive still has customer tax records).
Max Meade is an insurance advisor with Brown & Brown who specializes in assisting cannabis ventures across the United States in procuring proper insurance coverage and starting their businesses. Seeing cannabis help a close family friend inspired Max to want to help cannabis venture’s succeed and help patients. He may be reached at MMeade@bbdvins.com or 856-552-6358.