Does Your Business Need Cyber Security Insurance? How Insurance Fits Into Your Cyber Security Strategy
I spend a lot of my time at AdvanTech educating our clients about the fast-paced world of IT that is constantly evolving all around us. I consider it to be a fun part of my job – things change so quickly that I can’t expect everyone to catch up. But getting people up-to-date on some of the incredible things taking place always makes for fun – and helpful – conversations.
Just the other day, I was on the phone with one of our clients and he brought up the topic of cyber security insurance. It’s something that has become very popular in recent years, and more and more people seem to be finding out about it on a regular basis. But soon, I started to realize that he wasn’t looking at cyber security insurance as a way to supplement and augment his cyber security strategy. He saw it essentially as a replacement for that strategy.
This, of course, is a major mistake – and it’s one that I’d like to spend some time talking about now.
The Mechanics of Cyber Security Insurance: Breaking Things Down
At its core, cyber insurance is exactly what it sounds like – a particular type of policy used to protect businesses from a myriad of different Internet-based risks, but normally (and especially) those related to your IT infrastructure and similar activities.
For the sake of example, let’s say that you’re a small business owner and one day the unthinkable happens – you suffer massive hardware failure due to a cyber attack that takes your entire infrastructure offline. Given the fact that Gartner estimates that the average cost of network downtime alone is about $5,600 per minute once things like lost data and disrupted productivity are concerned, even a “small” incident can quickly become too much for most entrepreneurs to bear.
That, of course, is where a cyber security insurance policy would come in handy. Not only can it help provide the financial relief you need to get your business back up and running again, but it can also help make sure yours is not one of the 60% of small businesses that fold entirely within just six months of this type of attack taking place.
However, one of the most critical things to keep in mind is that even the most robust cyber insurance policy is NOT fool proof. Many insurance companies still have prerequisites that you must meet in order to qualify for any potential payouts. If you buy a car insurance policy to protect yourself if you’re ever in an accident and then get behind the wheel with a blood alcohol limit that is four times the legal level, you can be fairly certain that your insurance provider is going to deny your claim when you wrap your car around a tree – even though you’ve been dutifully making your premium payments every month.
In a broad sense, a cyber security insurance policy operates in the exact same way.
In other words, you still need to have protection in place to benefit from the policy in the first place. You still need proactive network scanning and monitoring, and you still have to focus on things like access control, user permissions, and a security policy for BYOD (bring your own device) environments.
To put it another way, if you cannot prove that you’re making a concerted effort to prevent your business from becoming the victim of a cyber attack, that cyber security insurance policy isn’t going to help you in the way that you think because your claim is more than likely to be denied.
What’s in a Cyber Security Insurance Policy?
As is true with so many other types of insurance (and so many cyber security issues, for that matter), there is no “one size fits all” approach to finding the right policy. Different business have different levels of risk and will incur different levels of damage should the unthinkable happen.
Because of that, you need to take a long, hard look at the specific types of threats that you face so that you can find a policy to meet those needs.
Just a few of the types of coverage that you’ll want to explore include but are not limited to ones like:
- Coverage that protects against losses from issues like data loss, extortion, theft or hacking.
- Denial of service attacks.
- Liability coverage for damage that others sustain during a breach on YOUR organization.
- Post-incident public relations funds.
- Investigative expenses coverage.
- Criminal reward funds.
- And more.
Not all businesses need to worry about things like denial of services attacks, while others do. Likewise, some businesses who deal in a large amount of sensitive client data would need to think about some of those liability factors while others might not.
Only by gaining a better understanding of your unique situation will you have the information you need to pick the policy that actually works for you.
Building a Protected Future, Together
At this point, I recommend getting in touch with either myself or one of my colleagues at AdvanTech so that we can learn more about your business and how it operates.
That will give us a chance to confirm that we’re a good fit for each other, so that we can help find out what we can do to handle your cyber security issues moving forward.
Building a Protected Future, Together
If you're ready to take complete control over your cyber security efforts so that you can make sure you have everything you need to obtain that perfect policy when you find it, terrific - we want that for you, too.
Crystal is the COO and President of Advantech IT, a Fall River IT support company that has been helping small businesses by providing an innovative and unique blend of managed IT services in all of Rhode Island, Massachusetts and certain parts of Connecticut. Learn more about Crystal and Advantech IT here.