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Coalition Coverage: Is your business covered for the latest digital risks — service fraud and bricking?


The last thing you want is to have your business disrupted by a security failure. This series explores Coalition’s coverage and how it can help your organization in the event of a claim. However, insurance coverage can vary depending on different underwriting factors. The following descriptions are intended to provide a generalized summary of coverage offered by Coalition’s cyber insurance policy. You should review your Coalition cyber insurance policy for specific details about your coverage. If you are not a policyholder, you can speak to one of our brokers today for more details.

As organizations' dependence on computer networks increases exponentially, your business’ cyber vulnerabilities do too. In fact, threat actors are no longer looking to just access your employee or customer data. They have found new — and old — ways to exploit your digital infrastructure and assets as well.

Two of the latest emerging risks to your businesses’ digital infrastructure and assets are service fraud (also known as cryptojacking) and bricking. These tactics can be devastating for businesses because they are not covered by a general cyber policy.

Like “phone phreaking” in the 1990s, in which bad actors hacked into a business’ long-distance phone account and racked up charges, service fraud is when a hacker attaches malware to a business network in order to steal their computing power, often racking up large bills with their IT services provider. Most commonly, cryptojacking involves stealing computing power to mine crypto currency.

Bricking happens when malware infecting your business’ network permanently damages the firmware on computer equipment or laptops to the point they’re rendered unusable — even a factory reset cannot restore it.

Coalition’s Service Fraud and Bricking cyber coverage endorsements help protect businesses from these emerging digital risks.

What is Service Fraud – and how can you protect your business from it?

More and more organizations are engaging third-party IT vendors, moving their core operations to the cloud. Think: Microsoft 365, Salesforce, and Amazon Web Services. Small businesses outsource IT services because they lack the in-house capacity, while large organizations don’t want to be in the business of managing their IT services. Regardless of the reason, the benefits are great for all size businesses. But so are the risks.

While service fraud or cryptojacking has been seen as a negligible threat in recent years, Japanese tech service provider NTT said crypto miners made up 40% of all detected malware in 2020 — a trend that’s only increased since.

Criminals use service fraud to gain access to your network the same way they would with any other online scheme, through a third-party vendor, phishing email and more. Then, instead of stealing your employee or customer PII, the threat actor uses malware to harness your business’ computing power to mine cryptocurrency. Or, a hacker gains access to your admin accounts, so they can run up a tab on your IT vendor’s account. Both of these examples are claims that would generally be covered under Coalition’s Service Fraud coverage.

Coalition’s Service Fraud endorsement can also cover the direct financial losses an insured incurs for being charged for the fraudulent use of cloud-and internet-based services including Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Network as a Service (NaaS), IP Telephony and more.

What is Bricking – and how can you protect your business from it?

When your network server and computer have seemingly suffered no physical damage, but malware installed on it has rendered it unusable, you’ve been a victim of bricking.

Formerly known as Systems Integrity Restoration, Coalition’s Bricking endorsement is essentially computer replacement coverage. It covers the replacement computer systems, like laptops, that are permanently impacted (i.e., cannot turn off or on) by a non-physical peril resulting from malware.

As the first to offer Bricking Coverage, Coalition’s endorsement addresses the growing gap between a business’ general cyber policy and their property policy, as compromised firmware is not a physical damage, but physically damaging to computer equipment.

Tip: All policyholders should immediately toll-free +1 833 866 1337 or email claims@coalitioninc.com as soon as you think your business has been the subject of a cyber attack or incident. The sooner, the better.

Protect your business: Get insured

Cyber insurance is a key factor in addressing and mitigating cyber risk and can quickly facilitate remediation if your business is the target of a cyber attack.

Coalition offers a wealth of resources to help businesses implement good cybersecurity practices, including our Cybersecurity Guide, which outlines the basic tenets of a cybersecurity program — a critical factor in reducing your organization’s cyber risk.

For questions about Coalition’s claims process or to be connected to a broker, reach out to our team.

Are you a broker interested in offering Coalition cyber insurance to your clients? Click here to get appointed