Cyber Threats: 5 Questions Every Risk Manager Should Ask
Questions around cyber risk can be dizzying now that it has become a business concern from the board level down.
In May and June 2017, two separate large-scale cyber attacks put the world on edge. The first attack employed so-called WannaCry ransomware; the second was a new strain of sophisticated malware commonly called Petya. Both caused widespread disruption to business by exploiting the Microsoft vulnerability Eternal Blue.
With some estimates showing that data breaches will cost businesses a collective $2.1 trillion by 2019 (a 400 percent increase over 2015), the best way to prepare for a loss is to do everything possible to prevent one. Is your organization prepared for the next major cyber attack and the potential risk to physical property? There are a number of questions you should ask your property insurer:
1. Can you help me understand my exposure?
It’s important your insurer explains what it can do to help you manage your cyber exposure. Many insurance companies are partnering with cyber security consultants or risk management firms. Their focus may be on event detection and breach response, but more than just detection and response is needed. Insureds should know their risk, and be prepared and resilient.
2. Can you help me improve my cyber risk?
As the number of cyber attacks increase, more companies will be exposed to financial loss and damage to their business reputation if they are not prepared to defend themselves and respond swiftly when breaches occur. Your insurer should be able to explain how it can help you assess all aspects of cyber risk, including your physical security, approach to information security and reliance on internet-connected industrial control systems. And it should provide practical, cost-effective solutions to improve the risk.
With some estimates showing that data breaches will cost businesses a collective $2.1 trillion by 2019 (a 400 percent increase over 2015), the best way to prepare for a loss is to do everything possible to prevent one.
3. Does my current property policy cover cyber?
It’s important to know exactly what kind of cyber coverage you have. You may have purchased stand-alone cyber insurance products, and may also have some type of cyber coverage in your property or general liability policy. You will want to know which policy will respond in the event of a loss.
Different companies have different cyber exposures. For instance, if you are most concerned with personally identifiable information (PII), then you’ll want to be sure to purchase enough PII liability cover. Companies with manufacturing operations are generally concerned with cyber physical events and, therefore, will want to ensure adequate coverage in their property policy to cover those types of events.
4. How will my insurance policies interact if I have a loss?
In the event of a cyber attack, you could be confronted with a wide range of consequences: damage to your data, network interruption, third-party liability and so on. Your focus will be on remediation and getting your company back in business. What you’d like to remove from the equation is uncertainty over how your cyber policies will interact. For a risk manager, the key is to know how your company’s policies will react before a loss occurs.
5. Can you help support my cyber risk discussions within my organization?
As a risk manager, you play a vital role in helping your company better understand cyber risk and its impact on your organization. Your insurer should be able to provide you with cyber resilience solutions that allow you to collaborate with your chief information security officer (CISO), or equivalent, to understand the business impact cyber risk has on your organization.