What Is Cyber Risk?
Cyber risk, in short, is the inherent risk of financial loss or damage to your reputation associated with your information technology infrastructure. Your IT systems offer you a wealth of opportunities but as with anything else in life, opportunity doesn't come without risk. In general the benefits of this technology far, far outweigh the risks but, as we'll discuss in the next section, these risks are much less traditional than what you're used to dealing with, and they have a tendency to snowball out of control.
A More Complex Form Of Risk
Cyber risks differ from traditional risks in that they are much more complex and layered. As an example of a more traditional risk, say that a fire damages some of your equipment. Now you have to replace this equipment. Maybe you also get behind schedule and have to work a bit harder in the future. Situations like these are frustrating to deal with and pose a serious financial risk, but they are simple enough to understand and prepare for.
Now let's look at an example of cyber risk. One of your employees is the victim of a phishing scheme and a hacker steals their account name and password. They use the password to log into the user account. Now they have access to sensitive customer data that they could use in a number of ways. They could choose to blackmail you. They could sell the data to some other nefarious party. They could use the information themselves to steal someone's identity or make unauthorized purchases.
That's just the beginning and it's an example of what would happen should a single employee be compromised. What if every employee is compromised? What if hundreds or even thousands of customers have their information stolen like this? You could be held accountable financially for damages suffered by each and every person who is affected by this cyber attack. It's so much more complicated than damaged property or someone slipping and falling in your store. That's why cyber risk is considered separately from more traditional business risks.
Properly Managing The Risk Associated With Cyber Crime
As cyber risks differ from more traditional risks, you need to approach them differently. You can mitigate and contain these risks, but you can never fully eliminate them. Cyber insurance is designed to protect businesses financially in the event that they are the target of a cyber attack. The extreme and unpredictable costs of these risks can sink a business in no time, but with cyber insurance, the risk of financial devastation is much lower.
At Summerlin-Roberts we perform a personalized risk assessment to find out where your weaknesses lie and determine the best course of action to minimize your risk. Please, contact us today to learn more about our cyber insurance policies or to schedule your comprehensive risk assessment.