Why a Responsible MSP Recommends Cyber Insurance
You might wonder why would an MSP like RTS, tasked with assisting companies in combating cybersecurity threats, write an article recommending Cyber insurance?
First, the truth is, no matter what mitigation efforts you implement, it’s not a matter of if a breach is coming; it’s a matter of when. “Cyber insurance provides peace of mind for this inherent risk of doing business in our dynamic digital world. It’s a crucial part of any good cybersecurity risk management strategy, serving as a backstop when other protection measures fail,” according to James Napp, Technology & Cyber Insurance Specialist at PSA Insurance.
Second, RTS’ unique approach to servicing its customers means we don’t simply offer hands-off technological guidance; we take on a CIO role that synthesizes your technological needs with your long-term business strategy and financial goals. And just as RTS takes a comprehensive approach to IT, a good Cyber policy doesn’t just pay claims – it offers a single point of contact for essential support when managing a potentially devastating cyber incident.
Should a cyber event occur despite all your best efforts to protect your organization, the right Cyber coverage will protect you financially and provide you with essential resources and experts to manage the fallout. These would include:
No matter the extent of the breach, any company that suffers a cyber-attack is required to notify all affected individuals and any applicable regulatory authorities as soon as possible. Handling this announcement can certainly be a nerve-wracking task. But your Cyber carrier will help you coordinate the notification process.
Managing your reputation after an attack can also be challenging, which needs to be handled promptly and carefully by a trained professional to preserve your image. Proper Cyber insurance can provide you with the PR team to help you create pitch-perfect statements, press releases, and updates that will evoke confidence in your plan of action and limit the damage to your brand’s reputation.
Fair or not, when you’ve experienced a data breach, you are at high risk of being a target for legal action. In general, you can be held legally liable if you:
- Failed to provide timely notice of the breach, as required by applicable laws
- Failed to respond to the breach in a timely and acceptable manner or failed to appropriately limit the damage caused
- Failed to implement reasonable data security measures to prevent being breached in the future
Regardless of how well you feel you have responded, you may be fined by government authorities or sued by customers or shareholders if they think you did not take appropriate measures to protect yourself and their organizations. Therefore, upon discovering any type of attack, your Cyber insurance carrier should assist you in immediately seeking the advice of legal counsel to determine who needs to be notified and what potential legal ramifications could be coming your way.
To help contain the breach and give your customers a clear picture of the extent of the damage, you’ll also need to work quickly to assess how the hack happened. Cyber insurance can also assist in this area by connecting you with cyber forensic specialists who will do this type of detective work, as well as help cover the expenses associated with these typically drawn-out investigations.
If you end up being the victim of a ransomware attack, you might not only have disappointed customers or strict government authorities to deal with. You will most likely also be looking at a ransom negotiation to regain control of your systems or stolen customer data. As in any hostage situation, you will probably not be in the emotional headspace or have the experience required to handle these negotiations. Therefore, using professional negotiators provided by your insurance carrier will likely produce the best results.
Cost and Lost Income
Hiring all of these specialists on your own without Cyber coverage would be a costly and exhausting process without some kind of assistance. For example, “for just a forensics team to sort through the aftermath of a cyber-attack, you could easily find yourself shelling out $50,000. And that is just one vendor in the recovery process. On the other hand, Cyber coverage for a small to mid-size business ranges from $1,500 to $3,500 depending on their operations, number of employees, risk control measures, and several other factors,” says Napp. Therefore, in the long run, having insurance is bound to be much more affordable as it will not only pay for forensics but the rest of the recovery process as well. In addition, a Cyber policy can also reimburse you for lost past, and future income should an incident occur.
If you’re looking to dive into the details or have further questions about the role Cyber insurance plays in your business’s overall cybersecurity strategy, don’t hesitate to contact me at firstname.lastname@example.org.