The Remote-Work Vendor Model Creating A Data-Leak Blind Spot: A Conversation With Norm Hudson

Estimated reading time: 5 minutes

Data leaks. Third Party Risk. Unauthorized access. Insurance companies spend real money on cyber controls. Then they hand the keys to a cheap “offshore” vendor model that cannot stop someone from snapping a photo of a customer’s Social Security number. Data exposure. That is the warning from Norm Hudson, an insurance operations executive who founded Staff Boom and has built broker, wholesale/MGA, and insurtech businesses across the insurance ecosystem.

Hudson says he sees a fast-growing trend in insurance outsourcing that looks like a business but operates like a loose recruiting pipeline. “We’re seeing people begin to start these offshore businesses, but they’re not actually a business,” he said. “Just going into these countries and hiring people. And the people are working from home.”

Norm Hudson, Staff Boom

He says that setup creates a simple, brutal security problem: “There’s no way to safeguard the data security.”

“All Things Being Equal” Thinking

Hudson says buyers chase labor arbitrage and assume the rest will sort itself out. “The end users are just unaware of what they’re stuffing into,” he said. “They’re kind of viewing all things being equal.”

They are not equal, he argues, because the moment a worker handles regulated data outside a controlled environment, the company loses its practical ability to prevent copying.

In a physical facility, you can enforce constraints. At home, you cannot.

The Sterile Floor Versus The Kitchen Table

Hudson describes his preferred model as a controlled, audited environment built to reduce “reproduction” risk.

“In our facilities, you’re a badge in, badge out,” he said. “No cell phones on the floor. No writing utensils.”

He frames it around the types of information insurance operations touch every day: “License numbers and social security and credit cards,” along with other identifying data.

Think of the Apple TV show Severance, which portrays workers at a company who have no memory of life outside work. While at work, they likewise have no recollection of work when not there. Their work and personal lives are separated. Severed.

Severance Apple TV+ poster showing strict workplace security protocols, a sci-fi example of the controlled vendor environment needed to prevent a data leak and control third-party risk..

“Very similar,” Hudson said. Workers arrive, put personal items in lockers, and operate on a “sterile” production floor. “There’s no reproduction capabilities allowed on the sales floor.”

Hudson says the newer “pass-through” vendor model does the opposite. It places workers in countries like Indonesia and the Philippines in work-from-home setups, which “creates a whole basket of issues around an inability to safeguard client data.”

Why Criminals Like This Data Exposure

Hudson does not talk in abstractions. He points to the kind of insurance-adjacent information criminals can monetize without deploying ransomware.

“Client renewal dates and expiring premiums and that name, address decision maker,” he said. “People would pay a lot of money for that.”

In Hudson’s view, that is the heart of the risk. “There’s no way of controlling that because you don’t have a physical site environment where you can restrict the ability to reproduce.

Third-Party Risk That Can Break Your Coverage Story

Hudson puts this squarely in the third-party risk bucket. “You’re knowingly handing off broad-level data access to a vendor,” he said.

Then he goes a step further, tying it back to insurance outcomes: “This is going to poke holes in a lot of the policy coverages because you’re not being responsible.”

His point is not legal advice. It’s an operational reality. If an insured cannot show basic vendor diligence and access control, it invites denial fights, underwriting pullbacks, and harsher terms at renewal.

Watch Our Podcast With Willis’ Peter Foster

AI Makes The Phish Better, Not The Business Smarter

Hudson also connects the vendor blind spot to the broader trend insurers already fear: smarter social engineering.

“The advent of AI is just making your phishing scams and your entry points far more sophisticated,” he said. “They look better.”

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He expects the market response to remain tight. “Cyber insurance specifically… is going to become increasingly restrictive in coverage and increasingly difficult to get because the frequency is happening so high.”

Hudson’s bottom line lands where underwriting and operations meet: outsourcing can work, but only when the vendor model treats data and the risk of exposure like a controlled asset, not a screen anyone can copy in a living room.

FAQs

1) What is a data leak in an outsourcing context?

It’s when sensitive information leaves approved systems or environments—often through copying, photos, screenshots, or unauthorized sharing—while third parties process the data.

2) Why does remote work increase the chance of customer data exposure?

Because it’s harder to control devices, rooms, and behavior at home. Even strict written rules can’t physically stop someone from taking a photo or saving information elsewhere.

3) Is offshore outsourcing always unsafe?

No. The risk depends on the vendor’s controls and operating model. A controlled, audited facility can reduce risks significantly compared to an informal work-from-home pipeline.

4) What types of insurance data are most attractive to criminals?

Renewal dates, premium details, decision-maker contacts, and identity-related information (like SSNs or license numbers) can be monetized through fraud, scams, and identity theft.

5) How can poor vendor controls affect cyber insurance?

Weak third-party governance can lead to tougher underwriting, restricted terms, higher premiums, and more intense scrutiny after an incident—especially if diligence and access controls weren’t documented.

6) What’s the fastest way to reduce vendor risk right now?

Start with data minimization and least privilege: limit what vendors can access, log everything, review access regularly, and require enforceable controls. If the workflow is highly sensitive, use controlled environments.

Martin Hinton

Martin Hinton is the Executive Editor and Publisher of Cyber Insurance News and Information. With over three decades of journalism experience across six continents, his work encompasses investigative reporting, documentaries, and coverage of cultural, political, and business news. To learn more about his career, click on his name to visit his LinkedIn page.