Why All Businesses, Big and Small Should Consider Cyber Insurance
Until a few years ago, business owners were still struggling just to adapt to the increasingly technological environment required for doing business. But once that hurdle was overcome, a fresh new risk promptly emerged – cyber crime.
It is not often you hear about a business risk being “deadly.” Failing to balance payables with receivables, taking on too much debt too fast, even expanding too rapidly – these have been the most lethal risks of doing business up until now. But today, the most deadly risk businesses face comes from cyber attacks.
“Cyber Crime” Defined
According to Interpol, cyber crime is not only one of the fastest-growing areas of crime internationally, but it is also shifting nearly as rapidly as it forms.
There are two main types of cybercrime:
– Advanced cybercrime. Also called “high tech” crime, advanced cybercrime is using technology to steal or disable technology. For example, a hacker writes a bit of code that shuts down a company’s firewall, exposing it to all kinds of additional hazards.
– Cyber enabled crime. Cyber enabled crime refers to the use of technology to commit other crimes, such as using automated phone systems or the web to impersonate a company in order to steal from that company’s customers.
Because cyber crime harnesses both the power and the anonymity of the internet to conduct criminal activities, it can be extremely difficult to impossible to track cyber criminals back to their source for prosecution.
Where the Vulnerabilities are Hiding
Cyber criminals live and work all over the world. But what many companies forget is that there is just as much of a threat, sometimes more (especially in highly technical industries), from their own staff and suppliers as there is from anonymous transnational cyber criminals.
A breach in a supplier’s operations can lead to a breach in your company as well. One dishonest and technically proficient employee who knows the inner workings of your company and its IT security system can bring the whole company down in a matter of moments. There are many vulnerabilities hiding right in plain sight that most employers don’t see until it is too late.
Where Cyber Insurance Fits In
Precisely because of the international and transitory nature of cyber crime, businesses today have little actual recourse by using traditional legal channels to gain justice and compensation for their losses.
Cyber insurance has evolved as an avenue for commercial victims of cyber crime to remain in business even while their case is investigated and (if possible) prosecuted.
Cyber insurance, often also referred to as “cyber risk” or “cyber liability” insurance, is now a staple annual purchase for an estimated one-third of companies nationwide for just this reason.
What Cyber Insurance Offers Your Business
Cyber insurance offers your company protections that no amount of traditional insurance can match.
Here is a list of typical reimbursements following a cyber attack:
– Forensic investigation expenses.
– Costs from ransomware, extortion and lawsuits.
– Benefits for affected customers, such as privacy protection and credit monitoring.
– Operational losses to the business caused by network outage, damaged reputation, data losses, damage to software or hardware and similar losses.
Selecting a Cyber Insurer
Along with a rising need for cyber insurance has come an increasing number of options. While different policies may offer different perks or incentives, ultimately you want to pick a stable insurer with a solid industry reputation that offers coverage for a wide range of cyber events and flexible policy options for businesses of varying sizes.
By understanding the irreparable damage cyber attacks can cause, you can take action by insuring your business against cyber crime with a cyber insurance policy.