As we enter into a new era of digital necessity, the need for cybersecurity has increased for consumers and business owners alike. Today, most of us rely on the convenience and added safety of online services, and consumers expect you and your business to protect them when doing business together.
The impact an attack could have on your business creates immediate risk, and not just from a financial perspective. Consider the importance of trust and how a cyberattack puts your customers at risk - not only that, you're also running the risk of losing their trust and losing your credibility. Think about your personal investments as a business owner - it's incredibly hard to build a business, and you must protect what you've created!
While the risks of an attack run the gamut, one thing is certain: cyber liability insurance can help you to cover costs and quickly recover in the event of a cyberattack or data breach.
Still not sure if your business needs cyber insurance? Here's why you should consider:
- A survey of risk managers (by consultancy Allianz) categorized cyber attacks as the top-ranked business risk.
- When it comes to small-to-medium-sized businesses (SMBs) 72% believe a successful cyberattack would be harmful to their business, with 22% believing their business would not survive an attack (according to a recent AppRiver survey).
- Most general liability coverages do not protect a business from these threats.
- The average cost per lost record is rising - increased from $148 (2018) to $150 (2019) (Ponemon Institute and IBM reports).
- In recent years, several companies have been forced to close or declare bankruptcy as a result of a major data breach, with the average cost of a breach ranging from $3.86 million to $3.93 million, (Ponemon Institute and IBM reports).
- While plenty of trustworthy companies do experience breaches, a cyberattack could also put a business’s reputation at risk.
- An increasingly data-driven economy will continue pushing boundaries on how systems connect, interact and share information—and with that, risk will undoubtedly grow.
Consider the following in order to protect your business:
- Stay up-to-date on laws, regulations and front-end protection procedures by following and/or subscribing to industry newsletters and trade journals for regulations/laws/etc.
- Take inventory of your company's confidential information. This includes what type of information (SSN, Protected Health Information, Employee Personal Data, Intellectual Property), its storage locations and backup strategy(s) to ensure that you have a clear understanding of your risk and your recovery options.
- Estimate the cost of a cyberattack. Keep brand equity in mind, as nearly 40% of companies experience a severe curtailing of their reputation after an attack.
- Prepare a network of trusted partners. Is there a security team that can help you mitigate damage?
- Do you have adequate contingency plans in case of a cyberattack?
- Make cybersecurity communication a top internal priority. Company communication and employee training is a must, noting internal threats are some of the most significant. Verizon’s 2020 Data Breach Investigations Reports nearly 30% of all data breaches can be attributed to accidental insider threats.
The good news: cyber risk is insurable. With cyber liability preparedness, your business will be positioned to avoid financial and reputation risks from a cyber breach. While cyber liability is a relatively new insurance product and policies are updated annually, engage your IT vendor to make sure you're properly covered if you have or are considering liability insurance.
At Connecting Point we specialize in understanding the risks and unique needs of businesses to ensure adequate protection. Feel free to reach out to us for more information and support at 970-356-7224.