Category Uncategorized

Every July 4th, we celebrate a declaration that one group of people wouldn’t answer to a power that didn’t have their best interests at heart. It’s worth borrowing that idea for a minute and pointing it at your business.

If you run an accounting firm, a bookkeeping practice, or any small business here in the Hill Country, ask yourself: how independent is your business, really, when it comes to technology?

Dependent on luck. If your only cybersecurity plan is “we haven’t been hit yet,” you’re not independent — you’re just unlucky-free, for now. Ransomware doesn’t check your revenue before it locks your files.

Dependent on one person. If there’s a single employee who knows where everything is, how the network is set up, and what the passwords are, your business isn’t independent — it’s hostage to that person staying employed, healthy, and around.

Dependent on hope. If you’re an accounting or bookkeeping firm handling client SSNs, bank account numbers, and tax records without a written information security program, you’re hoping the FTC Safeguards Rule never comes looking, and hoping a breach never comes looking either.

Real independence for a small business looks different. It looks like:

Monitored endpoints, so something odd gets caught at 2am instead of discovered at 9am with a ransom note on the screen.
Documented, boring IT, so the business doesn’t grind to a halt if one person is out sick or takes a new job.
A written compliance program, so an audit or a regulator’s letter is a formality instead of a fire drill.
A partner, not a hero, watching the systems so you can get back to serving your clients instead of babysitting a server.

This Fourth of July, as you’re grilling and watching fireworks, take five minutes to think about whether your business is actually independent — or just dependent on nothing going wrong yet.

If you want a second set of eyes on where the gaps are, that’s a conversation worth having before the fireworks, not after a breach.

If you run a medical office, dental practice, mental health clinic, or any business that touches a patient’s data, you’ve probably heard the buzz about HIPAA changes rolling out in 2026. Here’s the maybe-not-surprising truth: the federal government proposed the biggest update to HIPAA’s Security Rule since 2003 — and then missed its own deadline to finalize it.

What’s Being Proposed — And Why It’s a Big Deal

The Department of Health and Human Services (HHS) published a Notice of Proposed Rulemaking (NPRM) in late 2024 that would fundamentally change what “HIPAA compliant” means for your IT systems. The proposed changes include:

• Mandatory encryption of all electronic protected health information (ePHI) at rest and in transit — no more treating this as optional
• Multi-factor authentication (MFA) required for every system that accesses ePHI
• 72-hour incident reporting to HHS when a breach occurs
• Annual penetration testing of your systems
• Vulnerability scanning every six months
• Enhanced documentation and business associate oversight requirements

This would be the first major update to HIPAA’s security requirements since the original rule was written — before cloud computing, before ransomware-as-a-business-model, before telehealth became mainstream.

So Why Hasn’t the Final Rule Been Published?

The rule was targeted for finalization in spring 2026. That window came and went — no announcement, no final rule, no confirmed timeline for when one will be issued.

Here’s why that’s dangerous if you assume it means you’re safe to wait:

The Office for Civil Rights (OCR) — the agency that enforces HIPAA — has been handing out fines and settlements for years for exactly these issues: inadequate encryption, missing MFA, and failed risk assessments. The proposed rule isn’t introducing new ideas. It’s formalizing what OCR is already enforcing right now through penalties.

Being late doesn’t mean enforcement is late.

What’s Already in Effect Right Now

Not all of the changes to the HIPAA rules are still pending — they’re already law:

• Notices of Privacy Practices (NPPs) were required to be updated by February 16, 2026
• Part 2 regulations (covering substance use disorder records) were aligned with HIPAA as of the same date
• Enforcement trends continue to tighten around security risk analysis failures

If your practice hasn’t updated its NPP or conducted a formal security risk analysis recently, you may already be out of compliance — today, not in some future deadline.

5 Questions Every Healthcare Business Should Ask Right Now

Whether you’re a covered entity (healthcare provider, health plan) or a business associate (accountant, IT provider, billing company) that handles PHI, here’s what you should be asking:

• Is all ePHI encrypted—both at rest and in transit?
• Is MFA enabled on every system that can access patient data?
• When did you last conduct a formal security risk assessment?
• Do you have documented incident response procedures?
• Are your business associate agreements (BAAs) up to date?

These aren’t hypothetical future requirements. They’re what OCR looks for when something goes wrong.

How LAN Services FBG Can Help

At LAN Services FBG, we help small businesses in the Texas Hill Country get — and stay — compliant with HIPAA and related security frameworks. Our managed IT services include:

• Endpoint encryption and monitoring
• MFA deployment and management across all your systems
• Security risk assessments aligned with HIPAA requirements
• Documented incident response planning
• Business associate agreement (BAA) review support

The final rule will come. Don’t let it catch you off guard.

Contact us today for a free, no-obligation HIPAA readiness conversation.
lanservicesfbg.com/contact

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