Data security and cyber exposures are becoming a greater threat to organizations of all sizes, and insurance agents and brokers can provide valuable counsel to their clients on insurance and associated risk management services available. According to a recent article in BoardMember.com, Boards are not paying enough attention (see here):
Many boards have largely failed to recognize the basic existence of cyber risks, much less understand the different types that are out there.
The article also points out that cyber crime has grown significantly more sophisticated, and notes a new type of attack:
Advanced persistent threats, or APTs, slowly rob companies of their most valuable information. They are not the work of hackers, but of tenacious, well-funded professionals focused on espionage…While breaches of customer data usually generate administrative costs, the newer breed of APT attacks could thwart strategic plans, costing untold amounts. In a 2010 report, Mandiant, a computer security firm, relayed the case study of a Fortune 500 manufacturing company that was forced to give up its plan to acquire a Chinese firm after discovering that details of its pricing and negotiating strategies had been pilfered from its computers.
Obviously, organizations need to be proactive in protecting their data and business processes through appropriate security measures. Insurance offers an additional form of protection that organizations can use.
Increasingly, companies are turning to cyber risk and privacy insurance to protect themselves. Such policies generally cover damage to a company’s data or lost income resulting from a cyber break-in, as well as liability from any lawsuits….The most useful aspect of the policies may be coverage for post-breach response costs, as well as services designed to help companies respond.
The counsel provided by insurance agents and brokers to their clients on insurance and associated risk management services can be a critical component of an organizations cyber security strategy.