Stop me if you have heard this one before.
The business landscape is changing.
Not exactly a revolutionary statement, right? And considering I am a business broker with an MBA, you are probably looking for something with a bit more substance to it than that.
OK, fair point. How about this…
In March of 2020, when COVID hit Maryland, employers needed to scramble to keep their businesses operating. Some of those companies pivoted and began adding more online capabilities. Many of those capabilities were either backend operations that allowed their staff to work from home or front-end operations to allow for contactless ordering, payment, and delivery/pickup.
Now, those same changes that kept you afloat, have increased your online exposure and are putting you, your business, your employees, and your customers at a greater risk of cyber-attacks. In fact, according to an article published on Reuters in July, between 800 and 1,500 companies have already fallen victim to cyberattacks.
And, if you think that you cannot possibly know any of those companies – you are wrong. Our very own Eye on Annapolis became a victim in August 2021.
If Everyone is a Target, What Can Be Done?
Luckily, there are a couple of ways that business owners can fight back. The first is to invest in cybersecurity professionals and training.
However, there are two challenges with this plan. One, it assumes that you have the budget to do it – which not everyone does. And two, it is not foolproof. Studies have shown that mandatory training is less effective than elective training. Also, skills learned during training are only retained if they are immediately used. Meaning, even the best training is forgotten shortly after the student leaves the classroom.
So owners need another avenue to protect themselves, their employees, their customers, and their business. Enter Cyber Insurance.
What is Cyber Insurance
Cyber Insurance is a new insurance offering that protects your company in the instance of a cyber-attack. Just as tornado insurance protects your property if it is struck by a tornado – not that we have those in Annapolis – Cyber Insurance is designed to help you:
- Mitigate Financial Loss from Cyber Incidents
- Recover Quickly from Cyber Incidents
- Fulfill your contractual obligations
Who Needs Cyber Insurance
If you are the Colonial Pipeline, and vital to the interests of the American people – you may be OK without cyber insurance. After all, the government ended up bailing them out when they got attacked earlier this year. However, not many businesses can claim that status, so counting on the government to bail you out is not your best bet.
Cyber insurance, like any other good business insurance policy, gives you that peace of mind that if something happens, you are still covered. Lou Facciponti, an independent commercial insurance broker based in Annapolis, notes that “a cyber breach can cost as much as $146 per record exposed; therefore a large scale cyber-attack would put many businesses permanently out of business without a cyber liability insurance policy.”
Mike Foundos with Reilly Insurance Agency in Crofton agrees, adding “there’s a common misperception that only the ‘big guys’ get attacked. In reality, it is exponentially more likely to happen to the small to medium-sized businesses.”
And based on my 17 years of background supporting IT efforts for the Department of Defense, I completely agree with both. That is why I strongly recommend any business owners I work with to consider adding Cyber coverage to their commercial insurance.
If you are interested in learning about how much it could cost to cover your company from cyber liability, reach out to Lou and/or Mike for a quote.
|Lou Facciponti, CLCS
United States Insurance Services [email protected]
Reilly Insurance Group