21
Dec
2015

Cyber risk and your business

December 21st, 2015 | in Insurance

Cyber risk and what does this mean to my business?

As technology becomes more easily ingrained in our society and we become more reliant on it, the risk of being “hacked” on our computers used in business also increases. Canada now leads most of the globe as being one of the most wired countries.

Security problems involved rather primitive viruses that were unwittingly imported via a file attachment. In many cases these were easily eradicated with the proper tools and did minimal damage. As technology advanced, the way these attacks were launched also became more sophisticated and the resulting damage was much greater, in some cases actually shutting down servers and corrupting files permanently.

Luckily, anti- virus programs also got to be better sentinels at the “virtual gate”. However, so did the hackers with their malevolent plans and so this challenge continues.

A new twist on virus use is the outright theft of your customers’ information from a data base used by the businesses. Large retailers like Target and Home Depot have been in the news over data breaches that resulted in tens of millions of dollars in expenses. While your business may not be visible enough to attract unwanted attention like the aforementioned companies, there is still a threat that your security may be breached and your data compromised.

http://www.ibc.ca/on/business/risk-management/cyber-liability

There are two exposures with this type of criminal activity,

1)      The cost of notifying your clients about the breach.

2)      The costs to remediate the situation which will likely include lost revenue. You may need to reduce your business activity to address the problem or worse, could not operate at all.

Earlier in 2015, Canadian cyber security legislation was tabled in the federal budget. It has yet to be debated and voted on due to the election, but it’s certainly something that is going to continue to be on the government’s agenda because of the serious consequences of security breaches.

Insurance companies are starting to offer limited cyber risk coverage that will assist businesses in reducing some of the associated costs in exposure to data breaches. There are also some corporate partnerships being started that offer specialized advice in preventative anti-breach protocols.

Learn more about these new initiatives by calling our office.