Cyber Insurance and IT Outsourcing: What are the Trends?
October 19, 2017
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Stories about hackers exploiting software or hardware vulnerabilities are all over the news these days. The latest in this year’s string of break-ins was the highly disturbing news that roughly 143 million Americans had their social security numbers stolen from Equifax. Cyber breach is so prevalent now that insurers have developed an entirely new service line surrounding it. It’s called cyber insurance, and it helps businesses mitigate the damages caused by hackers should you experience a data breach.
This post explores cyber insurance as an IT outsourcing tactic to mitigate risk. What does it cover and should you buy it?
Why Would You Need Cyber Insurance?
Cyber insurance is really a type of IT outsourcing that helps companies pay for the damage caused by malware or data breach. While the more widely publicized hacks – Equifax, Target, Sony – make the news, there are a plethora of small to mid-sized businesses affected every year. Small Business Trends says 43% of all cyber attacks target small business. Conversely, only 14% can handle the problem.
That’s because the small to mid-sized business operates on a thinner margin than their behemoth competitors. What are the typical costs of a cyber attack? According to Info-Tech Law Advocates, the actual financial costs of a big data breach can include:
But those stats don’t cover the damage to your reputation that occurs when the news breaks that cyber terrorism has occurred. For small businesses, this could simply evolve as a lack of goodwill in the marketplace. Worst-case scenarios could include widespread media coverage.
The latest round of phishing-driven malware is called ransomware. Ransomware is a virus designed to encrypt all of your files, shutting down your network until you pay a ransom to the cyber bully.
How much would it cost your company if your IT systems shut down completely – even for a few days?
These are all arguments in favor of considering a cyber insurance business policy.
Wondering if your cybersecurity strategies will provide the protection your business needs? Get a free assessment of your risk of cyber breach.
IT Outsourcing with Cyber Insurance
According to Info-Tech Law Advocates, most cyber insurance policies are currently crafted to fit the specific risks your business faces. Typically, there are two types of coverage:
These policies vary widely for caps on financial coverage, the scope of incident covered, and in other areas, which make this type of insurance particularly hard to understand and compare. Too, your current business policies may have clauses that provide coverage that could fit an IT security incident. Check with your professional insurance carrier to determine all of your options.
IT Outsourcing Stops Cyber Attacks
Cyber insurance is designed to lessen the effects of a cyber attack after it occurs. But IT outsourcing to a managed service provider helps mitigate your risk before the cyber attack happens. Managed services can include IT outsourcing for security, which could include:
IT outsourcing can manage and secure of all your hardware and software, whether it’s in the cloud or on-premise. IT outsourcing can also entail managing your corporate cell phones or develop security policies that encompass employee devices that access network data.
Managed service providers can ensure that all security patches are updated quickly and efficiently as soon as they are released. They also help businesses guarantee regular backups of all their data, which is currently the most effective technique for combating ransomware.
TOSS C3 offers IT outsourcing as a service, whether it is the assessment of your system architectures to discern any vulnerabilities, or developing virtual machines and cloud backups that ensure you will never lose data should a ransomware virus occur.
Contact us today to request a quote.
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