Cyber-attacks in your insolvency practice: What to look out for and how to avoid them

Insolvency practitioners handle sensitive financial information every day: client accounts, creditor lists, restructuring plans and legal documentation to name a few. Unfortunately, this makes the sector an attractive target for cyber-criminals. Whether you’re advising distressed businesses or managing complex administrations, a cyber-attack could compromise confidential data, disrupt operations, and damage your professional reputation.

Here’s what you need to know about the most common threats and how to keep your practice protected.

Why insolvency practices are prime targets

Cyber-criminals see insolvency and restructuring work as fertile ground because:

• Time-sensitive cases put pressure on firms to act quickly, creating opportunities for mistakes.
• High-value transactions make practices an appealing target for financial fraud.
• Sensitive data, such as bank details, contracts and creditor information, is incredibly valuable on the dark web.

A single breach could lead to data theft, fraudulent transfers, regulatory fines, and ultimately, loss of client trust.

Key threats

1. Phishing and spear phishing emails

Fraudsters craft convincing emails posing as clients, colleagues, or regulators. A single click on a malicious link or attachment can compromise your systems.

What to look for:

• Urgent requests to transfer funds or share documents.
• Slightly misspelled email addresses or domain names.
• Unexpected attachments or links.

2. Ransomware attacks

Malware encrypts your files, and criminals demand payment to unlock them. Even if you pay, there’s no guarantee you’ll get your data back.

What to look for:

• Suspicious pop-ups or files appearing unexpectedly.
• Slow or frozen systems that suddenly become inaccessible.

3. Business Email Compromise (BEC)

Hackers infiltrate an email account to impersonate partners or directors, tricking staff into making fraudulent payments.

What to look for:

• Subtle changes in bank details during a live case.
• Requests for secrecy or bypassing usual approval procedures.

4. Weak passwords and poor access control

Shared logins or simple passwords make it easier for attackers to gain entry.

What to look for:

• Passwords written down or reused across systems.
• Users with more access rights than they need.

How to protect your practice

1. Staff training and awareness

Most cyber-attacks start with human error. Regular training helps your team spot suspicious emails, calls, or requests.

2. Robust cybersecurity measures

• Use multi-factor authentication on all accounts.
• Keep software and antivirus systems up to date.
• Back up your data securely and test restoration regularly.

3. Strict payment controls

Verify any new payment instructions verbally with a known contact before transferring funds.

4. Incident response planning

Have a plan for what to do if a breach occurs: who to contact, how to isolate affected systems, and how to notify clients.

5. Cyber insurance

A tailored Cyber insurance policy can help cover costs associated with data breaches, legal liabilities, and business interruption caused by an attack.

The bottom line

Cyber-attacks aren’t just an IT issue; they’re a business continuity risk. For insolvency practices, where trust and timing are critical, even a short disruption can have severe consequences. Proactive measures, supported by the right Cyber insurance, can help safeguard your reputation and your clients.

We’re here to help

As specialist Insolvency insurance brokers, we understand the unique risks insolvency practitioners face. We can help you secure tailored Cyber insurance and advise on practical risk management strategies. Contact us today to ensure your practice stays protected from evolving cyber threats.