Cyber Insurance isn’t necessarily new, but its popularity and need are growing among businesses. However, is it worth it for businesses? Yes, it is and we’re here to tell you why. Increased interconnectivity and data accumulation is essential to conducting business. However, this has made businesses a particularly attractive target for hackers, when compared to individual victims.
Consider the following scenario:
Cyber Insurance to the Rescue
Last fall, Mavis received an email that she assumed was sent to her by mistake. She replied to verify (gotcha!) and a response from hackers came to her confirming that the email was, in fact, for her. A few days later, Mavis noticed several emails were being sent out on their own. It was as if her email program had a mind of its own. She was hacked! And if that wasn’t bad enough, Mavis also worked with lots of financial information.
So, what could be done? Well, Mavis’ boss called her insurer and opened a case through her Cyber Insurance policy. After an in-depth investigation using digital forensics, they found that the hackers were from Lagos, Nigeria. The hackers had been in Mavis’ system for several days looking for keywords like payment, wiring instructions, and wire transfer among other terms. The hack wasn’t cheap. But, luckily, the $200K expense was mitigated by the Cyber Insurance Liability policy.
The scenario just described isn’t fictional. The full story was shared on All Things Considered, a segment by NPR.1 Don’t think that this is an isolated case so rare it gets highlighted in a radio segment. This is happening all over and with increased frequency.
Are You a Cyber Security Risk?
Most of us are used to sharing more and more data in our personal lives. There are capabilities like autopay, autosave, form fills, web history, facial recognition and more. This reality is making it more difficult to realize the amount of customers’ personally identifiable data that may be at risk in your possession. Think about it. Do you have digital access to addresses, names, passwords, emails and payment information? Would it only affect you in the case of a breach or would other partners or customers be affected? All this information is a gold mine for hackers looking to capitalize on vulnerable areas in your cyber activity. Sometimes these exposed spots are a matter of infrastructure and security. Other times they come down to us, humans.
It’s important to consider how safe you are on a day-to-day basis when it comes to your cyber security practices. Are you mindful when storing passwords and financial information? Are you being careful with what you click? What about your assistant or other employees? A sizable portion of a businesses’ cyber liability is due to poor practices.
Cyber Insurance is Worth It
So yes, Cyber Insurance is worth it. In the case that your company is infiltrated by cybercriminals or hackers, Cyber Insurance will provide valuable coverage that can potentially save you millions. And it does more than just that. It also forces you to pay attention to those bad habits that are opening the door to that Trojan Horse (pun intended).
Cyber Insurance isn’t a mandatory coverage. But like Car Insurance, good habits are rewarded by insurance companies. That financial incentive may be the push many of us need to adjust our behavior.
Where Do You Fall?
A recent study by Forbes Insights and The Hanover conducted a survey with small business owners around the country that indicated the overwhelming lack of preparedness against cyber risk. According to the study, 94% of businesses face a cybersecurity risk. 80% of small businesses recognize their exposure to risk, but only 20% are confident that they’re adequately insured.
To put it another way, imagine that 8 out of 10 companies you conduct business with don’t feel confident that they’re properly insured to protect you or themselves from a financial loss due to cyber risk. That’s a sobering thought.
Cyber Insurance is coverage that you should seriously consider for your business. Take time to evaluate your risk and speak to a Business Insurance Specialist. Get your questions answered. This is the only way you’ll be able to make an informed decision on whether a Cyber Risk Insurance policy is beneficial to your business.
1NPR does not promote or endorse any information, products or services from AIS Insurance.
The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms, and coverage in each policy may be different than those suggested here. And such policy will be governed by the language contained therein.