Cyber Attacks: A Growing Issue for Businesses
Wow, cyber attacks are becoming such a big issue that most major corporations are making it an important part of their risk analysis, their business production process, and even their executive staff. The role of CISO, which is an executive that handles risk and insurance, is becoming a much more important role in a company. What’s happening is cyber liability insurance is becoming almost an expected part of a responsible company’s risk profile, just like you wouldn’t go without fire insurance or work comp insurance.
The Necessity of Cyber Liability Coverage
Companies are realizing you cannot have a viable business without having cyber liability coverage. The coverage, in addition to paying if something goes wrong, also plays an important role in prevention. They have active monitoring in most cases and also have a response team. Organizations, even if they don’t think they’re at risk of a cyber attack, are seeing the news. Non-tech companies are getting hit all the time: restaurants, building companies. We had a cement plant that was attacked the other day, and they’re realizing that just because you’re not a tech company doesn’t mean you’re not at risk for a cyber attack, and it can really put a crimp in your business.
Consequences of Cyber Attacks on Businesses
As we’ve talked about before, a cyber attack might end up with a company having to go out of business. Sixty percent of companies that have a serious cyber attack go out of business within two years. So you want to make sure you have that kind of coverage. The article goes on to say that standalone cyber insurance policies are becoming the norm. You don’t want to get one that’s built into your normal general liability policy because it may not have the kind of coverage you want. It may have a limit of maybe $50,000 and doesn’t have some of the other protections.
Consultation and Expert Advice
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Responsibilities of Executives in Cyber Risk Management
Policies by themselves are pretty substantial, but it does put new responsibility on that executive to evaluate the cyber risk and make it part of the insurance selection process. That’s the key. You want to make sure that you determine the levels of coverage, and a well-versed, responsible insurance broker can help you do that knowing what other companies do. That executive should be able to influence the board or the executives about the need for coverage. You shouldn’t be shut down or silenced because you’re telling your board that you need to have insurance coverage.
The Increasing Frequency of Cyber Attacks
The threats are big, and every week, every month, there’s more and more cyber attacks you’re reading about in the news. Every company is at risk, so this is becoming a much larger piece of the puzzle for corporations. It affects your sales, it affects your marketing, your business development, and how fast you grow. So don’t look at it necessarily as just a pure expense. It’s part of your business development to make sure that you’re not going to be at a loss.
Condition of Doing Business Today
According to one executive, it’s a condition of doing business today. Companies need to meet a certain level of security to qualify for a good policy. So make sure that you’re at least applying for an insurance policy on the cyber side because if you’re not approved, that means the insurance company sees you as too high of a risk, and maybe you want to work on some things internally at least to become a better risk for your insurance.
