Your company’s greatest risk of loss might not be what you think it is.
For business insurance you might think first of property, flood, general liability or even workers comp insurance. The mix varies depending on the industry but, regardless of the nature of its operations, virtually every company faces substantial cyber risk.
We don’t get asked about cyber risk insurance as often as we should, especially considering the severity and rising frequency of cybercrime, but think for a minute. Can you name a business that operates without data, information technology and the internet?
No doubt about it. Info tech is indispensable to most business operations. It’s undeniably risky, too, and not just to data but to your dollars. This has been true for some time and still cyber risk commonly goes overlooked, misunderstood and underestimated by managers and brokers alike.
Ask yourself this: would I rather have a fire in the night that burns my business property or lose all of my business data, including backup files? Plenty of managers would gladly choose the former because their business data is worth more than all of their physical property combined. The trouble is that they often don’t make the connection with their insurance.
When you heard about cyber-risk for small and medium-sized businesses in Florida, you used to hear first about privacy liability, fines for breaking mandatory-notice laws and federal privacy rules. You heard about encryption and customer data. These are “third-party liability risks” because a third party would be the one to get paid by the insurance company to compensate for damages.
Now, when you hear about cyber-risk, the first thing you should hear is “ransomware,” which is another way of saying digital extortion. The concept is tried and true. Hack into a company’s computer network, or its cloud service, grab the company data, encrypt it and send a ransom demand to be paid in Bitcoin. When the company pays up, it probably gets its data back.
If your personal ethics are of a criminal nature, and you possess moderately advanced technical acumen, you can escape with a handsome sum using ransom software to attack targets of opportunity. Such targets commonly manifest as small and medium-sized businesses in Florida. Big ones just make the headlines.
Should your company fall prey the tens of thousands of dollars it shells out are called “first-party losses.” We call them “first-party” because you, or your insurance broker, should have been the first party to ask about ransomware insurance at the last annual insurance review. That’s a joke. Sort of.
Call Beacon Insurance Partners at 813.343.0076 or email us at email@example.com