This article is sponsored and written by Coughlin Insurance.
Imagine this scenario: it’s a busy Friday wrapping up the quarter. Your accounting department receives an urgent payment request from a key ingredient supplier. The request comes from the usual contact’s email and references a past purchase order in your system. The supplier claims they haven’t been paid for the last order and needs a wire transfer today to ensure future deliveries aren’t disrupted. They mention a recent bank change and provide new wire instructions.
To avoid business disruption, your employee processes the payment using the new instructions.
A few weeks later, the supplier contacts you again, asking when the invoice will be paid. Your employee shows them the payment was processed weeks ago. Together, they soon come to a chilling conclusion: the email was spoofed, and funds were sent to a fraudulent account.
Scenarios like this have happened to numerous food and beverage companies in recent years. Cybercrimes are increasing in frequency and sophistication. Bad actors can locate key financial information, contact information, and even invoices to trick businesses into believing they’re dealing with a legitimate new client or existing relationship.
Prevention Tips:
1. Verify Through Phone Calls: It may sound like an antiquated policy, but it’s important: always pick up the phone to verify new purchase orders or changes to payment information. Call the company’s main number and ask to be connected to the person in charge of the order or payment. This simple step can prevent significant financial losses.
2. Email Verification Policies: Implement policies that require verification of any changes to payment information through a known contact from an approved list with a call. It’s also a good practice to have a senior director, owner, or other executive verify any such requests.
3. Avoid Clicking Unknown Links or Attachments: Encourage employees not to click on links or attachments from unknown senders. This is a common way for malware to infiltrate systems.
4. Regular Training: Conduct regular training sessions to keep awareness high. With the fast pace of work these days, people can forget important security measures. Regular training helps reinforce these practices and reduces the occurrence of cyberattacks.
5. Use Insurance Products: Consider insurance products that cover losses from cyber crimes. A combination of property, crime, and cyber insurance policies can help mitigate losses. Use an agent that specializes in your industry who knows coverages specifically designed for social engineering and fraudulent purchase orders.
6. Implement Multi-Factor Authentication (MFA): Adding an extra layer of security by requiring two or more verification methods can significantly reduce the risk of unauthorized access.
7. Keep Software Updated: Ensure that all software, including antivirus programs, is regularly updated to protect against the latest threats.
8. Use Strong, Unique Passwords: Encourage employees to use complex passwords and change them regularly. Password managers can help maintain secure and unique passwords for different accounts.
9. Back Up Data Regularly: Regularly backing up data ensures that you can recover information in case of a ransomware attack or other data loss incidents.
10. Limit Access to Sensitive Information: Ensure that only employees who need access to sensitive information have it, and regularly review access permissions.
With over 30 years of expertise in the food and beverage industry, Coughlin Insurance excels at crafting insurance policies that help mitigate losses. We are adept at connecting businesses with the resources provided by insurance carriers to prevent cyber-attacks.
Numerous training resources are available through insurance companies to help your organization stay vigilant against ransomware, social engineering, and general fraud. Increased awareness and prevention efforts have significantly decreased the occurrence of these claims.
Since 1947, Coughlin Insurance Services has strived to find ways to protect customers’ lives, have their backs and provide our special brand of service. As we evolved, we have expanded our offerings from personal insurance solutions like homeowners and auto insurance, to business and commercial insurance, including insurance for food manufacturers and contractors. To learn how we can help you, click here.
