As an adult, it is likely that you’re at least carrying one insurance policy. Life, renters, auto, home…. In fact, it is very likely that you have multiple policies that provide coverage for each and every aspect of your life. This coverage continues beyond your “stuff” and into your well-being with health insurance. While needed to take care of the everyday doctor visits and prescriptions, it becomes essential when faced with catastrophic events that result in huge medical bills. Unfortunately, these are the events that are unexpected, and have rendered many uninsured individuals into bankruptcy as a result of lack of coverage.
But what about your business?
Far too often we overlook cyber insurance as an unnecessary expense for our businesses, which is a huge mistake. It is the very same type of catastrophic event that can be the demise of all that you’ve worked for. Take for example the recent Colonial Pipeline breach. One leaked password and a legacy VPN led to the much publicized incident. It was discovered that they did pay a roughly $5million ransom to the hackers, which was likely covered by a cyber insurance policy that they had in place.
While it is true that the recently launched Ransomware and Digital Extortion Task Force was able to recover about half of the ransom paid, this is a very rare occurrence. Until ransom recovery can become commonplace, it is best to be sure your business is covered.
In a case such as the Colonial Pipeline, coverage could include any interest or costs that go into obtaining the ransom payment if a loan were required.
We also expect that the following were covered:
- Public relation expenses that would deal with the media, press releases, reputational damage, and so on
- Investigation into the breach to determine the cause and scope of the damage as well as identify any data and parties that were exposed and/or affected
- Legal fees
- Professional guidance on how to respond – there are rules that need to be adhered to! This includes the required credit protection identify theft monitoring for affected individuals
- Overtime compensation for employees who must deal with the additional workload from the breach, or the additional expense of hiring a call center to deal with the workload
- Reward money that could be offered which in the event that it led to the identification of the hackers
- Replacing or restoring data that was affected – which could also mean hiring consultants to assist
Make cyber insurance a non-negotiable factor.
And we’re just hitting on the obvious costs that could arise from a breach – or perhaps not so obvious to those businesses who don’t carry a cyber insurance policy. When you realize how high the risk is of a cybersecurity incident, and that the risk relies on humans not making mistakes (all it takes is one wrong click) then it should be obvious how important this type of coverage is. You have coverage for items in your home that you may never even use, but you still insure them. Make sure that you’re ensuring the business that pays for those things and the livelihood of those that work for you. When it comes to your business, have you invested in its well-being in the same way? A cyber insurance policy should be as important to any business as health coverage is to an employee.
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