A cybersecurity incident can be devastating to any company. But for a small- or medium-sized company, an attack can shut down the business. That’s why insurance is becoming a critical component of a comprehensive cybersecurity strategy.
But where do you start to make a choice in plans?
Cybersecurity insurance, often called cyber liability or data breach liability insurance, is a type of coverage that stands alone from other types of coverage. Should a network outage or service interruption be caused by a data breach or other cyber event, it helps the insured recover losses.
Here’s what you need to know to choose the policy that best suits your risk profile and business needs.
- Ransomware is on the rise; but so far, demands have had relatively low dollar figures. Now that hackers know companies will pay to have data returned, price tags will rise.
- Data protection is a priority for businesses as well as regulators, but when a determined hacker exposes that data to criminal elements, that business is now out of compliance. Fines and penalties may rise as the threat continues.
- Smaller businesses, it is presumed, will not spend the same on security as larger companies, and are perceived as a softer target by hackers. This view is self-fulfilling: If more attack because the target is perceived as weak, the target will find itself under attack more often.
- Hackers will grow more sophisticated, using viruses that are harder to detect, adapting open source malware they can purchase online, and in some cases, assume the identities of company players and wreak very expensive havoc.
What do you pay for with a cybersecurity insurance policy?
The policies for cybersecurity insurance are different from general liability or property plans because the prices and exclusions for this type of coverage vary much between insurers. But the cost is high in part because the cost of a breach is high and includes ransomware payouts, compliance penalties, breach remediation and reputational loss.
How to Minimize Costs of a Cybersecurity Breach
There are two best ways to avoid all these costs — the first being to deploy an advanced cybersecurity platform, one that has a “security fabric” or layers of protection, so threats that slip through the first layer can be stopped or slowed at subsequent layers.
The second is to make insurance part of that plan. Start with risk assessment with an expert who knows security. Take advantage of companies like Fortinet, a VLCM partner, and its free online cyber threat assessment program.
You’ll need to carefully review financial and customer data, and know if they are high- or low-risk. You’ll also need to know where you’re vulnerable, and that’s where an expert can help.
Remember, insurance alone is not enough to protect your business from the harms of cyber crime. Most policies will not cover intellectual theft — stolen plans, software code, or other property that is unique to your business. Insurance often cannot cover reputation or customer loss, because that cannot be charted on an actuarial table.
Your insurance needs to be coupled with strong cybersecurity controls and best practices. SpartanTec, Inc. can deliver the advantages of multiple layers of protection. Contact us.
SpartanTec, Inc.
Myrtle Beach, SC 29577
(843) 420-9760
https://www.spartantec.com/
Serving: Myrtle Beach, North Myrtle Beach, Columbia, Wilmington, Fayetteville, Florence
