The Cybersecurity Threat: Protect Yourself Now

16 May 2017 By Meaghan Tyndale-Williams

It was Dmitri Alperovitch, cofounder of the cybersecurity firm CrowdStrike, who famously said, “There are only two types of organizations: those that know that they’ve been hacked and those that don’t yet know.” According to multiple online news sources, cybersecurity is seen as one of the biggest current threats to businesses worldwide. Juniper Research has projected the cost of cybercrime at $2 trillion globally by 2019. That’s only two years away!

We have already seen how major data security breaches can spell disaster for high-profile companies like Target, The Home Depot and JPMorgan Chase. Target alone reported that the breach of its customer data cost the company upwards of $250 million. Data breaches can be caused by a multitude of commonplace incidents that you may not even give a whole lot of thought to like a leaked password, a disgruntled employee, a lost mobile device or a lack of encryption.

No longer is IT security solely the purview of the IT department, either. Threats—and security budgets—have increased and will continue to increase to the point that savvy companies need to involve the highest levels of management in its data protection initiatives. Not only is the privacy of customer information at risk—as bad as that is—but so is a company’s reputation, legal protection, financial stability, employee privacy and intellectual property resources. The sad fact is that regardless of company size, industry or geographic markets, no organization is immune from cybersecurity threats in today’s unsettled world.

Ideally, a company’s senior IT executive would work with the person responsible for keeping the company’s assets protected—most likely the CFO—to develop a strong action plan for minimizing the chance of a serious breach. Integral to the plan is a comprehensive insurance policy that will cover the company in the event of cybersecurity losses.

Here are some of the standard coverages offered in a cyber policy:

  • Network security liability
  • Private liability
  • PR/crisis management
  • Regulatory liability
  • Data recovery
  • Business interruption
  • Cyber extortion
  • Cyber crime/social engineering

This is a new area of risk for many companies as well as agencies and brokers. Some agencies may neglect to protect this area of their client’s business simply because it is unfamiliar territory for them; they don’t know what types of policies are available and which insurers are the preferred providers. There is a definite learning curve involved, so companies seeking protection should ask a lot of questions, compare policies in detail and scrutinize potential coverage areas carefully.

JGS Insurance has a long history of protecting companies against cyber-related losses and can help develop a proactive coverage plan that integrates cybersecurity with the rest of your company’s insurance needs. You may not be able to avoid cyberattacks entirely, but it certainly makes sense to try to anticipate serious leaks to the greatest extent possible.

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Last modified on Tuesday, 16 May 2017 13:49

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