M a k i n g S M a r t C h o i C e S i n i n v e S t i n g a n d L i f e i n 2 0 1 5

T h e W a y F o r W a r d

WGrowEmerging Market Hot Spots for 2015; Ten Financial Leaders’ Best Bets; Investing in Ebola Care

LiveTony Robbins on Personal Finance; Eight Ways to Look and Do Better; Three Lifesaving Heart Tests

MakeLuxury Philanthropy Making a Difference; A Hedge Fund Rebel’s Experiment; Why China is Over Bling

CuratorWorth’s Holiday Gift Picks Include a New Cessna Jet, Patek Philippe’s $2.6 Million Watch and Winter Fashion

t h e e v o l u t i o n o f f i n a n c i a l i n t e l l i g e n c e

®

v o l u m e 2 3 | e d i t i o n 0 6

33w o r t h . c o m

COVER_WOR33.indd 1 11/10/14 10:36 AM

Mogil Organization LLC Jeffrey S. Mogil, Chief Executive Officer

Greenwich, CT Leading Insurance Advisor

What kind of threat does ‘backoff’ malware pose for retail insurance policies? By Jeffrey S. Mogil

Recently, the U.S. government issued an alert regarding backoff point-of-sale malware. This malware has been blamed for more than 1,000 attacks. The impact of a compro-mised point of sale (POS) system can adversely affect both the busi-ness and consumer by exposing customer data. These breaches may impact a business brand and its rep-utation, while customer information may be used to make fraudulent pur-chases or compromise bank accounts. News agencies have reported on the discovery of large quantities of personal information taken from websites by Russian-based hacker groups and new malware threats focused at retailers.

Backoff malware is a “ram scraper,” or malware which can capture data stored in memory. It can log key-strokes and collect payment-card details stored in memory shortly after the card is swiped and before the information is encrypted. “Backoff is not a particularly sophisticated Windows Trojan. It was simply re-purposed to run on Windows-based POS systems and to capture credit card data from memory,” Paul Bel-char of Invincea has written. “In other words,” he explains, “Backoff should have been detected by standard Win-dows anti-virus software. In fact, most large anti-virus vendors had detection signatures in place for most variants within days of discovery in the wild.”

The financial cost of this breach is staggering. A company that has this kind of breach could have expo-sures of between $450 million and $500 million in lawsuits, regulatory investigations, breach responses, fines, assessments, loss revenues and security upgrades. Companies’ cyber liability policies are certainly triggered for these claim events, but now directors and officers liability policies are triggered as well. Signif-icant revenue loss may occur due to brand-name damage, customer fall-out and cost to IT security becom-ing claims events; and of course any shareholder action against the insured will trigger a directors and officers liability policy.

Many retailers should expect increased insurance premium rates, increased retentions and lower lim-its for their cyber-liability insurance. An insurance capacity problem for retailers has also developed. Many retailers are seeking new policies and increased limits, both of which are due to increased awareness of these events. Additionally, general insurance capacity has shrunk and the marketplace is tightening. Many retailers, moreover, have combined coverages, whereby both cyber-lia-bility and directors and officers lia-bility are combined into one policy.

This approach is now leading to almost unacceptable aggregate exposure. This has led to some

insurers backing off from writing new policies for major retailers, or at the very least charging a consider-ably larger premium than last year. Insurers have decided coverage will be at their pricing, or they won’t offer it at all. Meanwhile, demand for the coverage has increased. Retail-ers that had $1 million to $3 million in cyber-liability coverage are now looking to increase it to $5 million or $10 million, and those with $5 mil-lion in cyber–liability coverage are looking to increase their limits to at least $10 million.

“Backoff” has had an impact on personal insurance policies as well. Some of the high net worth carriers are including contractual wording involving extra coverage for individuals. For example, AIG Private Client Group has a Fraud SafeGuard endorsement, and its coverage is one of the broadest in the industry. Insureds have the flex-ibility to schedule their own limits for fraud, ATM robbery and stolen identity events.

The latter two coverages come with no deductibles. AIG Private Client Group has advised that cover-ages in other states vary. Every insur-ance company has different language and different coverages related to cyber-liability, identity fraud, credit card, forgery and counterfeiting. Insureds should read their cyber insurance policies very closely.

How to reach Jeffrey S. Mogil

Mogil is dedicated to providing superior and personalized service to our clients in a timely manner. To learn more about how we can help service your insurance needs, please call me at 212.252.7100.

liv

eg

ro

wm

ak

e

Mogil Organization LLC 41 West Putnam Avenue, Greenwich, CT 06830 212.252.7100

Mo

gil

or

ga

niz

at

ion

ll

C

Insurance Services Provided Extensive experience in personal lines insurance placement, including in-depth claims knowledge

Insurance Services Experience BS, insurance and marketing, University of Rhode Island

Ill

uS

tr

at

IOn

By

KE

vIn

SP

rO

ul

S

“Malware breaches may impact a business brand and its reputation; customer information may be used to make fraudulent purchases or compromise bank accounts.” —Jeffrey S. Mogil

091w o r t h . C o M D E C E M B E r 2 0 1 4 - J a n U a r Y 2 0 1 5

Insurance Services Experience 34 years

Email jeffmogil@mogil.com

Website www.mogil.com

About Jeffrey S. Mogil Jeffrey S. Mogil graduated from the University of Rhode Island in May 1980 with a BS degree in insurance and marketing. In June 1980 he started his insurance career with Fred S. James and Co. in New York as a marketing representative in the large lines casualty unit. After one year at Fred S. James and Co., Mr. Mogil took an account executive position with Frankel & Co. In January 1983, he joined his father, Alvin Mogil, in the Alvin Mogil Agency Inc., where he started concentrating on the production of new commercial business and the servicing of existing accounts. Slowly, he and his father grew the company with the addition of his older brother Ken (who passed away in 2004) and his younger brother Bob. In 1993, the firm was renamed the Mogil Organization. Today, Jeffrey S. Mogil is the CEO of the Mogil Organization and manages the daily operations. He is also responsible for mergers and acquisitions for the company and continues to work with a variety of clients in the areas of commercial, personal, high net worth personal and life insurance. Mr. Mogil lives with his wife Daryl and their children on Long Island.

the evolution of financial intelligence

R E P R I N T E D F R O M

®

Mogil Organization LLC is featured in Worth® 2015 Leading Wealth Advisors™, a special section in every edition of Worth® magazine. All persons and firms appearing in this section have completed questionnaires, have been vetted by an advisory group following submission by Worth®, and thereafter paid the standard fees to Worth® to be featured in this section. The information contained herein is for informational purposes, and although the list of advisors presented in this section is drawn from sources believed to be reliable and independently reviewed, the accuracy or completeness of this information is not guaranteed. No person or firm listed in this section should be construed as an endorsement by Worth®, and Worth® will not be responsible for the performance, acts or omissions of any such advisor. It should not be assumed that the past performance of any advisors featured in this special section will equal or be an indicator of future performance. Worth®, a Sandow Media publication, is a financial publisher and does not recommend or endorse investment, legal or tax advisors, investment strategies or particular investments. Those seeking specific investment advice should consider a qualified and licensed investment professional. Worth® is a registered trademark of Sandow Media LLC. See “About Us” for additional program details at http://www.worth.com/index.php/about-worth.

Jeffrey S. Mogil Chief Executive Officer

Mogil Organization LLC41 West Putnam Avenue

Greenwich, CT 06830

jeffmogil@mogil.comwww.mogil.com