Everything you need to know about cybersecurity insurance.
The bad guys are going after the accounting industry. With over 35 percent of cybersecurity breaches hitting professional services, it’s no longer a question of if a firm will be attacked, but when. So what can a professional service firm do besides shake with fear and wait for the inevitable? Well, in addition to bolstering its cybersecurity perimeter with a combination of more secure software and better habits — like not using email for client business and keeping software up to date — it can brace for the worst in a more proactive way. A way that makes bouncing back from a breach not only possible but much quicker and less painful. You can survive and thrive again, thanks to cybersecurity insurance.
What is cybersecurity insurance?
Bad actors are drawn to personal and financial data stored on the systems of small and mid-sized firms. Why? Because smaller firms usually have less security infrastructure than larger firms. Hackers can essentially access enterprise-level information without having to bypass enterprise-level security. Cybersecurity insurance not only helps mitigate the financial loss after a successful attack, but it can also help you assess the damage, send Bitcoin (if it comes to that), notify the relevant parties, and get you the right professionals to help you rebuild. Policies are designed to put the tools, professionals, and resources in place to help a business survive a breach.
What happens when your firm is breached?
First-party cybersecurity risks impact firm operations directly, whereas third-party risks affect your client data. The most common type of attack is a Trojan horse-like breach into a company’s network through a phishing email (a message containing a malicious link or attachment). With just one click on a bad link or attachment, bad actors can plant themselves in a network and set up shop in your email, reading messages and gathering information on your contacts.
When an attacker strikes, they can steal personal data and hold entire systems for ransom. In the event that pivotal information is held hostage, the failure to pay could mean getting locked out indefinitely, meaning your firm would need to rebuild servers, data, and client trust from the ground up.
After you’re hit, it’s all about crisis management. You’re legally required to inform state government and (in many cases) your clients about the offense. Each state has its own breach notification laws. If a security breach affects your clients’ data, you need to follow the notification requirements of each affected state.
How much does a cyberattack cost?
The cost of a breach can quickly add up. Between ransom amounts, paying damages to your clients, company downtime, and the IT professionals you need to bring in to rebuild, you can expect a hefty bill. Cybersecurity solutions experts typically charge at least $30,000, while your legal fees could reach up to $60,000.
For small businesses, a breach could cost you clients. An alarming 60 percent of small firms sell their business or go out of business within six months of a breach. If you don’t handle the situation swiftly and keep customers in the loop, your clients can quickly lose faith and jump ship. Instead of pouring thousands into legal, IT, and rebound teams, you could transfer the financial risk to an insurance company that has the resources, expertise, and experience baked in.
How much does cybersecurity insurance cost?
Before going all in on a cybersecurity policy, companies need to identify what their biggest risk areas are and what they stand to lose when they’re hit with an attack. When it comes to choosing the right policy, companies want to ensure their program covers client damages as well as their own services. The good news is cybersecurity insurance is relatively affordable. For a company making less than $1.7 million a year, cybersecurity coverage runs at around $1,000 a year.
Cybersecurity insurance can help cover the financial and logistical burden of a breach, all while speeding up the recovery time to get you back on your feet. However, securing a policy isn’t the be-all end-all solution when it comes to protecting your business. Firms and individuals should use insurance in tandem with security best practices to build the best defense. Taking email out of the equation completely and using invite-only secure platforms like Liscio can help stack the odds in your favor.