Why Your Business Needs Cyber Insurance
Why does your business need Cyber Insurance? Google “cyber attacks” in the United States. Guarantee you will see a recent attack followed by a long list of others that have occurred. This continues to be a growing issue. It is said last year alone 2400 organizations were hit by cyber attacks, however those are only the ones that were actually reported. At the time of this writing Colonial Pipeline has been hit by an Eastern European gang, which is causing gasoline issues all along the east coast.
Why are you seeing this article on an insurance agency’s website. It’s quite simple. While your business may not be the size of Colonial Pipeline, it is still a target and the exposure exists. You can help protect your business by making sure cyber insurance is part of your business’s overall insurance program.
How can I protect my business?
There are multiple ways to address this exposure. The first is to purchase a cyber liability endorsement that can be added to your current business insurance policy. However, each company’s endorsement is slightly different and may not address the exposures or offer the limits your business may need. The other option is to purchase a stand alone cyber liability policy. These policies tend to be more comprehensive because they allow you to address 3 key components. These are First Party Liability, Third Party liability, and ransomware. With the recent Colonial Pipeline situation, let’s focus on ransomware.
So what is ransomware?
Ransomware is a form of malware that encrypts one’s files. The victim is then demanded to pay a specified amount of money, a ransom, to the attacker in order to have their files released. Depending on the nature of the files, these ransoms can be quite substantial. Some attackers have gotten wise and will demand lower amounts of money in hopes of the business just paying the ransom to make it go away. These attackers will replicate this and spread out over multiple companies. Others will demand higher amounts for more well known and influential businesses.
A strong cyber insurance program addresses the ransomware exposure. This part of the policy can cover the costs of the ransom if you are not able to retrieve your files through other means. While many companies have paid these in the past, attackers are getting more creative and demanding crypto currency as the ransom payment.
Insurance companies that have a dedicated cyber insurance team can be invaluable when it comes to dealing with ransomware. More than likely your business is not the first target of your attacker. Dedicated Cyber Insurance Adjusters know when and when not to pay the ransoms sometimes based on the attackers themselves. Insurance adjusters know with certain attackers even if the ransom is paid, there is no guarantee you will be able to access your files again.
Contact Farris Insurance Advisors at 336-890-8800 to learn more about how a Cyber Insurance policy can help protect your business.