Whether you operate a non-profit, work in a service industry, sell products online, or, operate a retail brick-and-mortar store, your online ‘customer facing’ communication is conducted via your website. Not only that, you probably operate social media accounts and send emails to your customers and prospects – more than likely also connected to your website. So here’s the potential problem…with all this information stored on or disseminated via your website, your company is wide open to a cyber attack or data breach.
What is a cyber attack?
A cyber attack originates from one or more computers attacking another computer or many other computers or networks.
There are two types of attacks:
- Where the objective it to disable the target computer or knock it offline, or,
- Where attackers hope to gain access to your computer’s data and than assume admin privileges on it.
There are a number of tactics used by the attackers. These include:
- Malware that they download to a target computer that then steals data or encrypt files which they hold for ransom
- Phishing emails that fool victims into giving up personal passwords or engaging in some other harmful action
- Denial of Service attacks, which bombard a web server with fake traffic
- Man in the middle attacks, which fool a computer into logging into a compromised network
Recent Cyber Attacks
Every year brings new security breaches, but 2017 has seen some of the worst. From a data breach of the Equifax credit reporting agency, where cybercriminals gained access to the private information of 150 million individuals, to alleged state-sponsored malware attacks. In addition, ransomware attacks reached unheard of heights, with the WannaCry and NotPetya attacks causing havoc worldwide.
Here’s the staggering statistics…they’re expected to cause $5 billion worth of damages! That’s a fifteen-fold increase from just two years ago.
The Cost of a Data Breach
According to Kaspersky Lab the average cost of a data breach for enterprises globally, rose 11 percent in 2017. In the U.S., the average cost of a cyber attack for enterprises grew from $1.2 million in 2016 to $1.3 million in 2017. That’s only 10 times higher than the $117K cost of a breach for SMBs.
The future looks equally grim: cybercrime damage is expected to hit $6 trillion annually by 2021, with cybersecurity spending to hit $1 trillion over the next four years. And the industry is going to need 3.5 million new cybersecurity workers to clean up the mess.
Types of Cyber Risk
Cybercriminals are not the only cause of data breaches. Sometimes a natural disaster can cause the issue. For example, a power surge can wipe out your database and/or your safeguards against hackers. Human error can also cause problems. The legitimate loss of a laptop or a disgruntled employee who steals information while still employed by you.
Regardless of how it occurs, the consequences of losing client or employee data can prove astronomical. It’s not only the cost of legal fees and damage repair, but also any PR costs and those associated with the communication of the issue, which could ultimately mean a loss of customers/revenue.
Where to Get Cyber Insurance in California
Fortunately, cyber risk insurance policies don’t necessarily have to be expensive, in fact, some general liability insurance policies cover small breaches. Bottom line, if you rarely do business online, you might not need a separate Cyber Risk Insurance policy. However, if you process payments using a POS system, or you store sensitive client information (such as medical or legal), you need more than General Liability.
If you need more information on cyber risk insurance or other types of business insurance, contact Post Insurance. We are the largest insurance broker in Torrance CA and the surrounding area. Representing over 50 insurance companies, including Traveler’s Insurance, we have the right policy for your needs.
Ask us for a policy that covers business interruption plus communication and public relations. Many of our insurance company partners also have programs to help you put cyber training programs together to prevent a breach before it happens.
To receive a quote, call 800.262.9998.