Archives May 2026

Introduction

Earlier this spring, a single employee at Vercel — a well-known tech company — signed up for a third-party AI productivity tool using their work credentials. They clicked ‘Allow All’ on the permissions screen without reading what they were authorizing. Two months later, the AI vendor was compromised, and attackers used that OAuth token to access Vercel’s Google Workspace. Customer data was stolen. The incident triggered a public breach disclosure and is now part of a pattern that regulators and boards are watching very closely.

This wasn’t a sophisticated nation-state attack. It was an employee taking a shortcut.

For small businesses — especially accounting firms, bookkeepers, and financial services companies — this kind of story should hit close to home.

The SEC Is Paying Attention — And So Are Regulators That Affect You

Forbes contributor and Villanova professor Noah Barsky recently highlighted a growing trend: companies are now being required to disclose in SEC filings when employees’ use of AI tools creates a material cybersecurity risk. For public companies, that means a bad AI decision by one employee can show up in a regulatory filing.

But here’s the part that matters for small businesses: you don’t have to be a public company for this to affect you. The FTC Safeguards Rule already requires financial services firms — including accounting practices and tax preparers — to implement a written information security plan. The SEC’s 2026 Examination Priorities explicitly call out AI monitoring and policies. And state regulators are watching too.

If your team is using AI tools — and they are — and you don’t have a policy governing how, you have a gap. A gap that could cost you a client, a regulatory fine, or worse.

What’s Actually Happening Out There

“Vercel was compromised through a third-party AI tool with broad OAuth permissions — with a two-month dwell time before discovery.”
— PKWARE 2026 Data Breaches Report

Here’s the pattern we’re seeing in 2026:
• Employees sign up for free or consumer-grade AI tools using their work email or work accounts.
• They grant broad permissions — because the app asks and it’s faster to click ‘Allow All.’
• Client data (financial records, tax documents, emails) gets pasted into the AI tool for ‘help.’
• The AI vendor gets compromised. The attacker now has your credentials, your clients’ data, or both.
• You find out two months later. Or your client does.

For accounting and bookkeeping firms, this isn’t theoretical. Your staff has access to SSNs, bank statements, tax returns, and financial records. Any one of those pasted into an unsanctioned AI chatbot is a potential Safeguards Rule violation — before anything even goes wrong.

What ‘Having an AI Policy’ Actually Means

• A lot of businesses think they’re covered because they told employees, ‘don’t use AI for client stuff.’ That’s not a policy. Here’s what a real AI acceptable use policy covers:
• A list of approved AI tools (and the explicit message that everything else is not approved)
• Prohibited data categories — what can never be entered into an AI tool
• How to request approval for a new AI tool
• What happens if someone violates the policy
• How the company monitors for unauthorized AI tool usage

Think of it like your Acceptable Use Policy for the internet — except this one also needs to address what the AI vendor does with your data, who owns the output, and whether the tool is compliant with your client confidentiality obligations.

The Real Risk for Accounting Firms Specifically

• Under the FTC Safeguards Rule, you are required to:
• Identify and assess risks to customer information
• Implement safeguards to control those risks
• Train staff on your security program
• Monitor and test the effectiveness of your controls

An employee who pastes a client’s Schedule C into ChatGPT to ‘write a summary’ has introduced a risk you haven’t assessed, with a tool you haven’t approved, using data your safeguards weren’t designed to protect. That’s three Safeguards Rule gaps from one click.

What You Should Do Right Now

You don’t have to ban AI. In fact, you shouldn’t — it’s already a competitive tool and your staff is using it regardless. What you need to do is get in front of it.

Three immediate steps:
• Audit what AI tools your team is already using. (Hint: more than you think.)
• Draft or update your AI Acceptable Use Policy — before regulators ask for it.
• Have a conversation with your IT partner about approved AI tools that keep client data inside your controlled environment.

At LAN Services FBG, we help accounting and financial services firms in the Texas Hill Country build the kind of security foundation that regulators expect — and that clients deserve. If you’re not sure where you stand, our free IT Risk and Compliance Audit is a good place to start.

Because when an employee takes an AI shortcut with client data, it’s your name on the disclosure — not theirs.

You bought cyber insurance for your business. You sleep a little easier at night knowing that if ransomware hits or a data breach happens, your business is covered. That’s the idea, anyway.

But there’s a growing and quietly devastating problem hitting small businesses across every industry — including accounting firms, lenders, and other professional services: cyber insurance claims are being denied at an alarming rate. Not because the attack didn’t happen. Because the business couldn’t prove it had the security controls it either claimed to have on its application or that the policy required in the fine print.

The Gap Between “Yes” and “Proven”

When you apply for cyber insurance, you answer a questionnaire. Do you use multi-factor authentication? Do you have endpoint protection? Do you back up your data regularly? Most small business owners answer “yes” — and many genuinely believe they’re covered.

But here’s the hard truth: insurance companies don’t just take your word for it when it comes to them paying expenses at claim time. They are going to initiate there own investigate. Part of that investigation is that they want documentation. They want logs. They want proof that the control was active, enforced, and working on the day the incident occurred.

If you said you had MFA but it wasn’t enabled on every account that should have had it — denied. If you said you had endpoint protection but one laptop wasn’t covered — potentially denied. If your backups weren’t tested and verified — you may find out they’re not as solid as you thought, and your claim reflects that.

This Is Not a Small Problem

Cyber insurers paid out billions in claims over the past several years and they’ve responded by tightening underwriting requirements dramatically. The Hanover, Coalition, Chubb, and others have all increased their scrutiny of what controls are actually in place — not just checked on an application.

Here’s a real-world scenario playing out in small businesses right now: A firm gets hit with ransomware. They file a claim. The insurer sends an investigator. The investigator finds that:

• MFA was enabled on Microsoft 365 but not enforced on a shared admin account
• Endpoint detection was purchased but not deployed on two remote employee machines
• Backups existed, but the last successful test restore was 14 months ago
• The insurance application said “yes” to all three of those questions

Claim denied. The firm is now looking at hundreds of thousands of dollars in recovery costs, client notification expenses, and potential lawsuits — with no insurance safety net.

What You Can Do Right Now

The good news: this is entirely preventable. The controls your policy requires are not unreasonable. The problem is that most small businesses have never had someone sit down with them to compare what their policy actually requires against what they can actually document.

That’s exactly what we do at LAN Services FBG. We offer a free Cyber Insurance Alignment Review for local businesses — no pressure, no sales pitch. We walk through your policy’s requirements alongside the current state of your IT environment and help you identify any gaps before they lead to a denied claim.

What We Review In Your Free Assessment

Multi-factor authentication coverage across all accounts and platforms
Endpoint protection deployment and active monitoring status
Backup configuration, testing history, and recovery readiness
Email security (DMARC, anti-phishing) — critical for wire fraud and BEC claims
User access controls and privileged account management
Documentation you can provide to an insurer if a claim is filed

We’re not insurance agents. We’re not here to sell you a new policy. We’re IT and cybersecurity professionals based right here in the Texas Hill Country who understand what insurers are actually looking for — and how to make sure your business can prove it’s doing what it says it’s doing.
Because when an incident happens, “We thought we had it covered” is not a defense that pays your bills.

Ready to find out where you stand? Reach out to LAN Services FBG for your free Cyber Insurance Alignment Review. It’s one conversation that could save your business.

Contact: lanservicesfbg.com · Serving Fredericksburg & the Texas Hill Country

I’ll be honest — I almost lost a refund this week.

I had canceled an order online, received a confirmation email, and thought nothing of it. Standard stuff. But when I went back to find that email to follow up on the refund status, it was gone. No trace of it in my inbox, my trash, or anywhere else.

Here’s where it gets interesting: because I practice what I preach, I was able to restore that email from my backup. Armed with the original confirmation showing the date, time, and cancellation details, I reached out to the company — even though I was technically outside their refund window. The email proved my case, and it looks like I’m going to get my money back.

That’s a minor inconvenience for me personally. For a business? That same scenario could mean a lost contract, a compliance violation, or a client dispute with no paper trail to defend yourself.

Gmail and Microsoft 365 Are Not Backup Solutions

This is one of the most common misconceptions I run into when working with small businesses. People assume that because their email lives “in the cloud,” it’s safe and always accessible. But cloud storage and cloud backup are two completely different things.

Gmail, Outlook, and Microsoft 365 are designed to deliver and organize email — not to protect it long-term or restore it when something goes wrong.

Here’s what can actually happen to your email without a proper backup in place:

• Accidental deletion — You or an employee deletes a thread, thinking it’s junk. It’s gone.
• Account compromise — A bad actor gets into the account and wipes the inbox. Microsoft and Google won’t always be able to restore it.
• Sync errors — A misconfigured device or app deletes emails at the server level.
• Retention policy limits — Microsoft 365’s default deleted item retention is 30 days. After that, it’s gone permanently unless you’ve configured additional protections.
• Departing employees — When you remove a user account, you may lose all of their email history if you haven’t archived it first.

Why This Matters Even More for Accounting and Bookkeeping Firms

If you’re in a regulated industry — and accounting firms absolutely are — email is often a legal and compliance record. The FTC Safeguards Rule, IRS recordkeeping requirements, and client engagement agreements all carry expectations around data retention and availability.

Losing a client email thread isn’t just an inconvenience. It could be:

• A malpractice exposure if a dispute arises
• A compliance gap during an audit
• A lost defense if a client claims you never communicated something

Email backup and archiving isn’t just an IT best practice for your industry. It’s a risk management strategy.

What Proper Email Backup Actually Looks Like

A real email backup solution does several things your inbox doesn’t:

• Captures email automatically — Every message sent and received is archived in real time, separate from your email provider.
• Maintains long-term retention — Configurable to keep records for years, not 30 days.
• Enables fast restoration — Search and restore individual emails, threads, or entire mailboxes in minutes.
• Survives account-level events — Even if your Microsoft or Google account is compromised or deleted, your archive stays intact.
• Supports compliance — Many solutions include audit trails and legal hold features.

The Bottom Line

I got lucky this week — I had the right tools in place before I needed them. That’s exactly how it should work.

If your business relies on email as a communication and documentation tool (and whose doesn’t?), your email provider’s built-in storage is not enough. A missing confirmation email is a minor headache. A missing client agreement, a lost vendor record, or a compromised inbox with no recovery path is a business problem.

If you’re not sure whether your email is actually protected, that’s worth a conversation. I offer a free IT assessment for small businesses in the Texas Hill Country — it takes less than an hour and gives you a clear picture of where your risks are.

You can schedule a free risk analysis here: https://meetings-na2.hubspot.com/bryan-pritchett/free-it-risk-analysis