Cybercrime Costs Nearly Half a Trillion Dollars Per Year
Imagine you have a wonderful house and you’ve just installed an above ground pool in the backyard. One night, a drunken man wanders into your yard and accidentally falls into the pool and drowns. Are you liable? Was it your fault? Quite the grizzly analogy to be sure but one that is most apt for this month’s discussion on Cybercrime and Cyber Liability insurance. It is estimated that Cybercrime i.e. data breaches, hacking, financial fraud, data ransoms, malicious malware and many other types of internet crimes are costing the global economy nearly half a trillion dollars a year according to the insurer Allianz.
Implement the Proper Security Procedures and the Right Solutions
So to answer the above question? Yes, you are totally liable. However, if you have installed security cameras, built a fence in the backyard, you could reasonably claim that you did everything to protect yourself and thus, most insurance companies would not hold you liable. To draw the comparison, if you implement the proper security procedures and implement the right solutions to protect your data, you will not be liable. So is Cyber Liability insurance worth the investment? Absolutely! The term “insurance” in this context is probably not the best description. The word “assurance” is probably a better fit. Assurance, unlike insurance, is protecting the policy holder for not if, but when. Some insurers are trying to clear up the confusion by offering “fraudulent instruction insurance” which covers losses from the transfer of funds from a person purporting to be vendor, client, or authorized employee.
Managed Service Providers Can Help Prevent Cybercrime
Prevention is far less expensive than losing money to cyber thieves. While executives discuss the terms of cyber insurance coverage, MSP or Managed Service Providers like KLH can take steps to lessen the risk of attack both knowingly from outside sources and unknowingly from internal employees by reviewing your current network standards as well as your policies and procedures to make sure they are stringent and effective. In this day and age of cybercrime “an ounce of prevention is worth a pound of cure.”
KLH – Minneapolis IT Managed Services Provider
Scott Johnson | COO, KLH 651-328-6121