Does your business store digital information? If so, it’s vital that your business have a cyber risk management program. A successful cyber risk management program should have four different components that address prevention, disclosure, crisis management, and insurance coverage. In the event of a data breach, these four components work in harmony to protect your valuable data and, ultimately, your bottom line.
The best form of prevention is encryption. In fact, unencrypted devices are often not covered by cyber liability insurance. Encryption prevents unauthorized access to your data in the even that your company laptops, tablets, or smartphones are stolen.
In addition to encryption, it is important to educate your employees about different kinds of scams like phishing or farming. An educated employee is a valuable asset when it comes to breach prevention.
New risks arise constantly, so it’s smart to assess your cyber risks on a regular basis and get a sense of any holes you may have in your security.
Did you know that you may be legally required to notify certain parties of a data breach? This includes stockholders if your company is publicly traded. The Securities and Exchange Commission (SEC) has specific guidelines regarding how you must report cyber security incidents, even when your business is only at risk for a breach.
Disclosures about incidents and risks should be reported in a timely fashion as it is important for investors and clients to know. How much detail and information is reported should be carefully evaluated. For instance, if you unnecessarily notify all clients of a risk it could cause concern or distrust for those who wouldn’t have been affected by the potential breach.
It is of the utmost importance to be prepared. In the event of a cyber breach, you should have a plan in place for your business to respond quickly and adequately.
First, you should determine how and when the data breach occurred. You should also assess what information was compromised and how many people will be affected. What risks do you and your clients face and how will you mitigate those risks?
You should be communicative and let those clients know what actions you are taking to protect them, but you should also be judicious about how that information is disclosed and how much detail is offered. It’s important not to scare away your clients while you’re working towards a solution.
A response plan should be comprehensive. This means including your IT department, risk management, and in-house attorneys. All parties should be on board and know their individual protocols in the event of a cyber breach.
Protect Your Business
The final component of your cyber risk management puzzle is cyber liability insurance.
Cyber liability insurance will cover all the risks involved with the use of modern technology in your business. These types of risks aren’t typically covered by a business liability policy. Each business’ range of exposure can vary, so your cyber liability policy can be tailored to fit the precise needs of your business.
A cyber liability policy can be written to include the costs associated with disclosure following a data breach.
ERM Insurance Brokers in Irvine, California can customize a cyber insurance liability insurance policy to protect your business!
Call (949) 222-0444 to learn more.