A majority of businesses working with third-party subcontractors, tenants, and vendors are well aware of the various risks and compliance issues facing them in today’s economic climate. Unfortunately, many organizations tend to fall short when it comes to cyber liability insurance protection. Contrary to popular belief, traditional insurance does not cover cyber liability. This means that any criminal cyber activity, be it a data breach, hack, or exposure, could leave your business unprotected.
It seems obvious that understanding cyber risk and liability is necessary in protecting your own company. But what about your vendors, tenants, subcontractors, and other partners? Understanding cyber liability in today’s modern, tech-first corporate environment is necessary to protect your relationships. Here, we’ll go through what you need to know about the cyber liability space and uncover some best practices to protect your business from cyber risks.
What You Need To Know About Cyber Liability
Over the years, the biggest cybersecurity stories to hit the news have involved some of the biggest corporate names. Target, Google, and many others have struggled with cyber risk. This has caused a major misconception for many businesses who have come to think that only large corporations are at-risk for cyber attacks. In reality, companies with less than 75 employees are the reported victim in over 70% of reported cyber attacks. Organizations of all sizes across all industries are at risk, and this risk becomes even greater if you’re dealing with outside data from subcontractors, vendors, franchisees, or other third-party partners.
The reason that these smaller companies are often looked over? The fines alone from these attacks can quickly bankrupt an organization, even if it’s in good standing. Cyber attacks are a huge issue for modern businesses and can cost tens of thousands of dollars. The financial and regulatory repercussions are only the tip of the iceberg. Digital attacks can damage corporate reputations beyond repair, put customer and vendor data at risk, and even cause unwanted issues for employees.
Unfortunately, many businesses fall prey to cyber attacks because they don’t even realize that they are at risk. Just because an organization doesn’t deal with personal financial data like credit cards, or doesn’t collect email addresses of customers, or even if it doesn’t have a website (or internet connection!), doesn’t mean it is in the clear. There is always confidential information to be found. Sadly, it’s often internal employees that cause accidental data breaches, especially in smaller organizations.
How To Ensure Your Business Is Protected From Cyber Risk
It’s no longer enough for businesses to face down cyber risk with traditional business liability insurance. Instead, companies should take proactive steps to protect the business, employees, and partners from risk.
1. Invest in a strong cyber liability insurance policy. Again, a traditional business insurance policy does not cover cyber liability. To ensure both your business and any third-party partners who may be impacted by a data breach are covered and protected from any financial losses, a cyber liability policy is key. Cyber liability policies can change from vendor to vendor, which makes keeping track of these documents and data even more important on your side.
2. Make cybersecurity a top priority in your business. In industries that deal with multiple vendors, partners, and tenants, cyber risks can fall by the wayside in favor of more pressing business decisions. Before any data (digital or otherwise) is shared between two organizations, a security risk assessment should be administered. Requiring this type of security ‘background check’ shows partners your team is serious about safety while identifying potential partners that may be at-risk – or that may put your organization at risk – of a data breach.
3. Streamline insurance tracking operations. Dealing with hundreds of COIs on top of cyber liability insurance documents can be tricky. With a streamlined, automated insurance management system, your team can stay on top of liability and identify gaps in the compliance process as soon as they appear to keep your business, employees, and partners protected.
Want to learn more?
When it comes to insuring your business, including cyber risk and cyber liability creates a holistic, well-rounded shield against potential attacks. The team at myCOI can help you protect that policy and work with you to keep your team safe and accomplish your risk management goals moving forward. Learn more here.