Understanding Cyber Risks
Cyber risks are more than just cyber liability. You’ve heard of cyber liability, cyber attacks, and the total possible liability goes beyond just the cost of an attack. Many things come into play as what’s called perils—things that could affect you as an insured.
Contractor and Supply Chain Risks
A couple of examples: some contractors are having to pay settlements because they didn’t keep up with updated defenses against hackers and ransomware. In this case, it’s because they didn’t even do basic tests or basic monitoring on a regular basis. Another one is supply chain. Do you know if your supply chain or suppliers are secure with their cyber defenses or cyber insurance? Because if not, if you don’t even make basic inquiries to your supplier, and one of your suppliers is hit with a cyber attack, it can prevent you from being able to manufacture products or provide service.
The Consequences of Cyber Attacks
Your customers, best-case scenario, won’t like you. Maybe a little worse, they’ll leave and go to another company. Worst case, they’ll sue you because you didn’t provide as per your contract. So, you want to make sure that your suppliers are not only dependable in terms of raw materials, good management, and capitalization, but also that they have proper defenses against cyber attacks or insurance that covers you in case they are attacked and there’s nothing they could do.
Preventing and Preparing for Cyber Attacks
Look, nobody’s going to be able to prevent every single cyber attack. The hackers do this for a full-time job; they are out there figuring out how to get through networks. You want to follow best practices, do testing, regular maintenance, and monitoring of your systems. But you also want to be prepared if something happens. For example, in your building, you probably do things to prevent fires: you don’t store oily rags next to the heater, you don’t let people smoke in the warehouse, and you keep flammable items secured outside. But you still have a fire extinguisher in case something happens.
Being Prepared for Cyber Attacks
The same thing applies to cyber attacks. You want to do everything you can to prevent them, but you also want to be prepared if they do happen. How are you going to survive? Do you have a response plan? Do you have an insurance policy? Do you have people internally who can take action to prevent the losses from becoming greater? The losses are threefold: financial losses, people losses (you can lose good employees if your hack shuts down your company), and practical losses where you might have to spend days or weeks performing non-productive tasks. You may have to do things that aren’t selling more products or manufacturing more products. So, you have to account for all those types of losses when an attack occurs.
Ensuring Business Continuity
If you’re a smart company and a good business person, you’ll be able to put procedures in place for every type of contingency to ensure your business thrives even in the face of a cyber attack or a fraud event.
