What is Cyber Liability Insurance?
Cyber liability insurance is an insurance policy that provides businesses with a combination of coverage options to help protect the company from data breaches and other cyber security issues. It’s not a question of if your organization will suffer a breach, but when. There are many insurance companies offering cyber insurance policyholders which also provide access to tools and resources to manage and mitigate cyber risk — pre-breach and post-breach.
Don’t underestimate the value of your company’s (or your clients’) data. Threat actors are constantly trolling the internet for information that can be sold or traded. Some hackers infiltrate networks and quietly siphon information over months, while others attack suddenly, crippling a company’s operations. Some hack purely for monetary gain, and others do it to send a message.
If you use the internet or store data in digital or paper files, you need a cybersecurity plan. Even if it’s not integral to your operations, any connected computer, device, piece of office equipment or smart appliance can be an entryway for criminals.
Client, prospect and price lists are all commodities that might be interesting to the competition or scammers looking for new marks to exploit. Even something seemingly innocuous like a file-sharing link could expose the entire supply chain to a hack.
If your clients and vendors find out you’re the weak link in their data theft woes, it will be a hard sell to win them back, not to mention the lawsuits and fines.
Protect your business reputation and revenue stream
Companies need to prove they have a cybersecurity standard and are responsible for their data. Those that don’t prioritize cybersecurity could face penalties, client cancellations and damage to their reputation. For example:
- According to Arcserve’s 2020 Data Attack Surface Report, 59% of customers said they would avoid a business that was hacked, and 25% would abandon them completely.
- Sophos’ The State of Ransomware 2022 report revealed that the average ransom paid by midsize businesses over the past year was $812,360 (up 500% from the previous year). 86% of organizations that were attacked said they lost business because of the attack.
- ZDNet reports that over 80% of companies have suffered a cyberattack because another company in their supply chain had poor cybersecurity. Indirect costs of a hack include government fines and penalties, mandatory credit monitoring, lost business income and a tarnished reputation.
A hack is a lot to recover from, and some businesses never do.
Cybersecurity protects your business
Cyber liability insurance helps after the fact. You’ll need a good cybersecurity offense to keep the attacks at bay. Firewalls, multifactor authentication, information technology (IT) support and employee training are all great ways to get in front of the problem.
Not sure where to start? Try these tips
Many businesses find cybersecurity to be mysterious and overwhelming, so they ignore it. That’s a normal reaction, and one the bad guys are counting on. The best thing you can do is start somewhere and get ahead of the curve.
- Educate yourself about what to do in a cyberattack.
- Create a custom cybersecurity program using the Federal Communications Commission’s Cyberplanner.
- Train your employees on the importance of cybersecurity and how to spot social engineering scams like phishing, smishing, whaling and vishing.
- Block or disable unused ports to prevent cyberattacks.
- Install and maintain antivirus software.
- Employ spam filters.
- Install firewalls on individual computers and the network.
- Refer to the Federal Trade Commission’s user-friendly video tips and resources.
- Perform penetration testing to identify security weaknesses. (A reputable “ethical hacker” can help.)
- Request a cyber hygiene assessment from the Cybersecurity & Infrastructure Security Agency.
- Hire a third-party IT team to help implement and maintain your technology.
- Help everyone stay safer by reporting frauds and scams to the government.
- Review your cyber liability insurance policy (including coverage for ransom negotiations, public relations response and reimbursement of government fines).
Once you’ve started a cybersecurity plan, you can confidently assure clients and vendors that you’re the right business to handle their business.
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