Last October, I wrote an article titled, Cyber Insurance : What Michigan Businesses Should Know.
In it I stated that “the day is coming when Cyber Insurance is no longer an option”.
It would seem that the recent event that lead to Hollywood Presbyterian Medical Center paying a $17,000 ransom in bitcoin to a hacker who seized control of the hospital’s computer systems is a signal that the day is upon us.
Another red-flag, is activity from the cyber-hackers like the ones who sent an e-mail to Sony Pictures’ executives saying they would do great damage to the company if they weren’t paid off, and then 3 days later acted on that promise.
These crime are perpetrated by using Ransomware, which as a recent Forbes article it confirms,
Across the world, hackers are taking control of networks, locking away files [using software] and demanding sizeable ransoms to return data to the rightful owner.
While larger companies are investing more in cyber security to ward off attacks, they know they won’t be able to spend their way to absolute security.
For example, consider the fact that a team of more than 1,000 IT staffers with an security budget of $250 million wasn’t enough to save JPMorgan Chase from getting hacked in 2014.
And, as the chart below illustrates the average cost of data breaches is increasing steadily year after year.
Because of the increased fear of loss and cost related to post-data breach impacts such as; tarnishing of brand reputation, litigation, and lower earning reports.
Many company are turning to Cyber Insurance as a risk of cost mitigation tool, not a hack prevention effort.
A robust cyber insurance policy can help businesses weather the storm more effectively when a data breach or network security failure has occurred.
The Biggest Danger Is To Small Businesses
Because of the grandiose nature of the companies and randoms that make the news, it is easy to fall into the trap of believing the;
MYTH : Cyber Insurance is only needed by larger corporations, and tech companies.
The reality is that nearly every type organization of organization that uses technology to do business — regardless of size — faces cyber risk.
Sadly, small business owners tend to think that since a data breach addendum can be added to their typical business liability insurance they will be covered if hacked.
What these small business fail to realize is that as technology becomes more complex and sophisticated they do not only face new types of threats, but also unprecedented situations an insurance addendum is not capable of offering coverage.
This is why every small business and larger organization needs to be prepared with cyber liability insurance.
A separate cyber insurance policy can provide a full safety net in the event of a network security failure, something and add-on to an existing policy simply will not do.
We would love to know about your Cyber Insurance needs, stories, or comments.
In addition to Cyber Insurance, we suggest us protect yourself with some type of ID Shield program.
Please let us know in the comment box below.