As a business owner, errors and omissions are crucial to your business. Workers’ compensation coverage aids in lost wages. But what about cyber liability coverage? Can your business stay afloat after a ransomware attack coupled with the legal, forensic, and public fallout?
Not all cyber policies are created equal. Each organization functions differently and therefore has different needs and levels of vulnerability.
For example:
- Your team is a hybrid workforce- you work remotely and store data in a cloud service. Do you need cyber?
- You are a very traditional manufacturer; why should you consider cyber insurance? (let’s answer this question here- yes, your business is in one of the higher at-risk sectors!)
- You collect and process customers’ credit-card information–what security safeguards are in place to protect the data you are entrusted to handle?
- Does your organization need to comply with state regulations that require a business to notify customers of a data breach involving personally identifiable information?
- Do you pay attention to unique risks your organization may face based on the industry you are in?
- Are you ensuring that your emerging tech solutions are not putting your client’s data at risk?
In Response to Terrorism
In response to the looming cyber-terrorism brought about from the Russia-Ukraine conflict, the US is preparing for the possibility that cyber attacks could disrupt everything from water supply to bank operations and unprecedented sanctions, according to cyber experts.
Derek Vadala, chief risk officer at the U.S. cyber risk rating firm BitSight, warned Western companies to ensure their systems are patched against known vulnerabilities. “Everyone is on a heightened state of preparedness right now.”
Cybercrime Does Not Discriminate
Breaches affect organizations of all sizes and can be costly. The most recent NetDiligence Cyber Claims Study reports the number one cause of loss for SMEs to be ransomware.
- the average ransom jumped from $36K to $175K
- the average cost of a ransomware incident from $150K to $275K
- the average incident cost for large companies (across all types of incidents) was $9.1M
- Hackers remained the number one cause of loss
In light of the evolving cybercrime landscape, a complete cyber risk management solution may be the peace of mind you are looking for in your business. In order to have adequate cyber insurance coverage, carriers need to know that your business has been diligent to also mitigate risk upfront through top cybersecurity controls.
What Business Owners Need To Know About Cyber Liability
- Putting the proper controls in place may take a bit of time. Best practices required by most applications include proof of Multi-Factor Authentication or MFA, Segregated backups, Endpoint Detection and Response or EDR, and Cybersecurity Employee Training.
- Take time to understand the product coverage. The most prominent cyber risks are privacy, security, operational, and service risks.
- Learn when coverage only includes first-party versus third-party coverages, i.e., network security and privacy liability can consist of first-party and third-party costs.
- Don’t let your coverage sit on the shelf too long – at least 90 days before the renewal, ask for side-by-side comparisons. Saving money is always a plus when possible!
- A well-brokered cyber insurance policy will be covered up to the full policy limits.
With the media headlines and social media buzz alone, there isn’t a day that we don’t see a headline about a cyber attack. Businesses and their dedicated IT Managers should be working with a Managed Service Provider (MSP) that puts cybersecurity services first. An MSP who works diligently to ensure proper controls will help business owners mitigate risk and better align with cyber liability coverage.
If you’ve had difficulty placing cyber for your clients, reach out to FifthWall Solutions. Contact our Dedicated Producers to learn more at fifthwallsolutions.com/contact-us.
