When cyber insurance was introduced several years ago, it didn’t really catch on as a means of offsetting a digital catastrophe’s costs. With the impending threat of far graver cyber threats, though, companies are increasingly seeking assistance through insurance brokers who understand the potential threats caused by cyber-crime and can put in place effective strategies to combat potential loses. However, many businesses on the Sunshine Coast and elsewhere are still undecided if this is, indeed, necessary.
Unlike typical insurance policies primarily intended to cover the costs of a loss; cyber insurance was originally intended to give companies an incentive to amplify their digital security. Today, whether or not a company needs actual cyber security coverage is highly dependent on certain factors.
First, it helps to keep in mind that the more your company implements or transacts online, the more susceptible your business is to data breach. It may appear that specific establishments, such as banks and hospitals, stand to lose the most in security breach cases; but in reality, every company whose internal data has been compromised become vulnerable to outside threats. Simply having an email address puts you at risk. Unfortunately in today’s world, it is not just phishing or scammers who want to disrupt or undermine your businesses operations; hostile competitors can be just as big a threat. This rings true for businesses of all sizes and scopes, regardless of industry.
The key word in understanding insurance is protection. If your company’s digital structure is compromised, you are in for some serious trouble. Consider this: according to a 2014 global analysis of data breach costs, U.S. companies whose data was compromised, the average losses peaked at $201 per record. Try imagining a single data breach victimizing a multi-million dollar company with tons of data, and the damage is monumental. The American company Target lost $148 million in a quarter. Such massive losses should be enough to warrant the purchase of protection.
Still, it’s also important to remember that cyber insurance alone is not the end-all solution to such possibilities. It should be paired with a dedicated cyber security expert. This approach will essentially give business owners a two-phase defence against breaches: firewalls and the like will prevent malware from infecting the system, and when malware does break through, an appropriate coverage policy can pick up the slack by replenishing financial resources and facilitating a quick turnaround.
In short, it’s not enough that you have a strong digital security network in place. Cyber criminals nowadays are incredibly ingenious and will always try to find a way around your security measures. When they do break through, it helps to have an appropriate policy in place. Call a qualified insurance broker such as Insuring theProduct to help you identify the right policy that can protect your business from cyber-attacks.
This information is not intended to be advice and you should not rely on it as a substitute for any form of advice. You should always consider the PDS / Policy wording before making a decision.
Does Your Company Need Cyber Insurance? BizJournals.com, February 27, 2015