As we shift digitally, we increase our reliance on digital technology and when we do that, we put ourselves, our businesses, and our data at higher cyber risk such as data breaches or cyber extortion. This is why you need cybersecurity insurance.
Given the current COVID-19 pandemic, every major aspect of modern business today now relies heavily on information technology. Companies large and small are finding new opportunities to work and serve customers online. Whether it’s the local record store posting flip videos on Facebook or the large corporation conducting weekly zoom calls with their entire staff, we’re seeing a large shift onto digital platforms and improved business processes.
But as we shift digitally, we increase our reliance on digital technology and when we do that, we put ourselves, our businesses, and our data at higher cyber risk such as data breaches or cyber extortion. This is why you need cybersecurity insurance.
A data breach is an unauthorized access to the sensitive information you are holding on your computers or servers. A cyber attack is a malicious attempt by hackers to disrupt or damage your company’s information, typically through ransomware. Similarly, but different, cyber extortion is when someone extorts your company in exchange for monetary gain.
Many companies are shifting their budgets towards IT and are now allocating significant resources to fortify their networks to prevent unwelcomed access by hackers, as listed above. So, are you?
Are you conducting more team meetings virtually? Are you now sending sensitive data over email or via the cloud? Have you or your employees ever responded to an unusual text or email like a phishing scam, or made a mistake in your paper or receipt handling? If you store confidential information such as passwords, credit cards, or any identifiable information then it’s time to consider cyber insurance (if you haven’t already done so).
A 2016 survey published by data breach specialist NetDiligence found that approximately a third of cyber breaches were attributable to the (mostly unintentional) actions of employees. After all, emails may look legit, and requests may be asking for information specifically related to your business or appear to be coming from a customer.
If this sounds familiar, then this is an argument and pivotal reason why cybersecurity insurance should be a core solution for any company looking to manage this risk, including yours.
Recently, well-publicized data breaches at Capital One and Yahoo! saw sophisticated hackers stealing thousands of private names, email addresses, phone numbers, and, in some cases, passwords or social insurance numbers. If it can happen to large, multi-billion-dollar corporations, it can also happen to your small or medium business too. Your response (or lack of a response) to a breach will likely negatively impact your brand and reputation. These intrusions will also negatively affect the revenue of your business as well. In Yahoo!’s case, their settlement totaled $117,500,000.
Awareness of cyber threats has grown in recent years, thanks to those highly publicized cases. As reported in Insurance Business Magazine, cyber incidents ranked as the top business risk globally for the first time in the Allianz Risk Barometer 2020. 39% of respondents named cyber incidents as the top peril, knocking the former top risk, business interruption, into second place at 37%. Cyber incidents ranked 15th on the list of top business risks just seven years ago.
No IT solution will ever be enough but if you think cybersecurity and cybersecurity insurance is not necessary for your small to medium-sized business, you should think again. Security Boulevard states that for the third consecutive year small and medium-sized companies reported a significant increase in targeted cybersecurity breaches.
What Does Cybersecurity Insurance Protect?
Cybersecurity Insurance protects against a range of risks associated with network security and privacy breaches. It provides critical support and coverage ranges from $1 Million to $50 million. It also provides public relations support and crucial guidance to help manage the message of a cybersecurity breach to all impacted stakeholders.
To meet each organization’s unique needs, some insurance providers like Mississauga, Ontario’s Ai Insurance Organization provides a comprehensive cyber insurance package as a standard offering, as well as tailored coverages for specific cybersecurity solutions. In addition, they can arrange for additional coverages to be purchased as may be required or beneficial to your organization, especially as your company evolves and innovates due to the current global situation.
Read our blog article on our partnership with GamaSec and GamaSheild, which offers our cybersecurity insurance clients additional pre-breach vulnerability checks included.