It seems like every day there is a new story about a data breach and how millions of sensitive user records have been exposed. The financial and healthcare industries are two of the biggest targets with some of the most sensitive data about people’s daily lives. Theft and exposure of this data can open up these institutions to huge financial losses in the form of lawsuits and lost business. Companies need ways to prevent and mitigate these potential losses. Well-designed security protocols and software can prevent many of the data breaches that happen daily. There will always be some risk of a breach but the use of best practices and strong security software reduces the number of attack vectors and thus significantly diminishes the risk.
Knowing that there always remains the risk of a breach, the question every company should be asking is: Should Your Business Get Cyber Liability Insurance? As the CEO of LowCards.com (a free consumer resource website covering the credit card industry) points out, “many businesses are now turning to cyber liability insurance to minimize their risk of loss.” Bill Hardekopf provides a great 101 on Cyber Liability Insurance and why you should consider it. An important takeaway from the article is that “The insurance provider will evaluate policies, software and hardware to check for potential areas of weakness.” The provider may even set a minimum standard for obtaining insurance or charge higher premiums for companies with weaker practices and software. Even if the standards aren’t there today, they will be emerging, and they will begin to affect rates and overall liability of a data compromise or a breach.
A good analogy to cyber liability insurance is property insurance, something every business should have. Basic safety measures like fire extinguishers and smoke detectors are often minimum standards for even obtaining property insurance. More advanced features like a security alarm system result in discounts on the premium paid for insurance. In the same way with cyber liability insurance, installing anti-virus software or an advanced counter-exploitation platform could be considered a minimum standard or result in reduced premiums.
Given the importance of preventing a data breach most companies already implement counter measures. However, given the likelihood a business will be the target of a successful data breach, companies should also consider adding cyber liability insurance. Having a comprehensive plan for prevention and mitigation will help a company weather any storm that confronts them.
Grey Market Labs is a Public Benefit Corporation founded with the social mission to protect life online for people and organizations. Our software and hardware products are creating a future with privacy-as-a-service, delivering proactive internet protection from the moment of access to countering exploitation of digital behavior and activity. Simply: we prevent data from being compromised, establish trust between users and protect our customers work, online
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