Cyber Insurance and Your Business. What is your Exposure?
“Cyber attack” is a relatively new term for many of us, except for the unfortunate few who have already been the victim of one.
Simply put, a cyber attack is an attempt by hackers to damage or destroy a computer network or system. As businesses become increasingly dependant on the web for both sales and operations procedures, the opportunity for digital criminals to access valuable information also expands.
The types of attacks are broad and confusing, which can make identifying the risk for business owners difficult. The outcome of all the attacks fall under four common categories: loss of sales, cost of protection, loss of protected information and general private information leaks. Most recently, you may of heard of the ransomware attack called WannaCry that disabled people’s computers in over 100 countries until a fee was paid.
The impacts are clear and your job as a business owner is identifying and mitigating as many risks as possible. In some cases, it will involve updating company operation procedures, adding extra layers of authentication, encrypting your network and above all, ensuring you have the appropriate insurance policy to cover you for the worst case scenario.
Cyber insurance to the rescue.
Most home or business owners wouldn’t dream about leaving their property uninsured. Theft, fire, flood, and natural disasters—any of these unpredictable events can destroy your investment and have a substantial financial impact. Surprisingly however, when it comes to protecting your business’s data, many companies still have not acknowledged the risk nor taken the appropriate measures to protect against it.
If you haven’t heard of cyber insurance yet, you could be missing out on a vital lifeline that could save your business from financial hardship.
Standard business insurance doesn’t cover cyber attacks
Standard business insurance does not cover security breaches—a painful lesson Sony found out the hard way. Their PlayStation network was breached back in 2011, costing the company a whopping $170 million. When Sony tried to take their insurers to court, they lost. Part of the problem might simply boil down to a lack of understanding—and quite honestly, confusion about what a policy does and doesn’t cover.
Phishing scams, identity theft, and ransomware attacks all very real possibilities in today’s business world. Unfortunately, despite their very real possibility, such crime is not always covered in certain insurance policies. A quick conversation with your insurance broker to ensure you have sufficient coverage (or any at all) to protect your company’s finances in the case of a cyber attack is the first step. Your broker is your business’s best friend when it comes to cyber crime.
Take a proactive approach to cyber security
Cyber insurance can help you recoup the costs of restoring your data, downtime, investigation, and notifying your customers of the breach. This makes it a critical component of the health and safety of your business’ digital life.
It’s not easy to keep up with the ever-changing world of cyber crime, so it is important to choose your insurance provider carefully. You’ll need a team on your side that can keep track of the constantly changing rules, ever-evolving strategies and all the new ways you can be compromised that spring up almost daily. You will also need an impartial team ready that can provide a fair and honest assessment of your needs.
It is best to think of cyber coverage as a part of an overall risk management plan. To stay safe in today’s digital business world you need a proper security plan in place, like installing breach prevention measures into your infrastructure, beefing up managed services, training employees, and securing your electronic records off-site.
Whatever steps you may take, make sure they are strategic, thought out and well executed. If you have any questions for our team at Schill Insurance, please do not hesitate to get in contact with us today.