Cyber Risk Insurance: Does Your Business Need It?
In this time of digital transformation, businesses are more vulnerable than ever to cyber risks. The vast majority of companies now use the Internet in their business activities, exposing them to the potential risks of a security breach in their IT systems.
In addition to the stress caused by a cyber attack, financial risks, business interruption or loss of customer confidence are very real consequences for businesses that are targets of hackers. While basic security measures (two-level authentication, anti-virus, cloud-based data storage, etc.) help protect your business from cyber threats, cyber risk insurance could help limit the costly consequences of a cyber attack.
Why are small businesses exposed to cyber threats?
Did you know that nearly 25% of Canadian SMEs have been targeted by a cyber attack since March 20201? Why target small and medium businesses? First, because they are often perceived by cybercriminals as a gateway to large companies protected by a highly secure IT infrastructure. Second, because the servers of small and medium-sized businesses host a large amount of financial data and personal information of their customers, employees, suppliers, volunteers, shareholders, etc.
Cybercriminals employ several often ingenious and varied methods. Among them, the most common are:
phishing
ransomware
malware
Phishing example
A hardware store employee received an email and, without paying much attention, clicked on the link he was suggested to open. It didn't take much longer to breach the company's computer system and allow malware to enter. This trivial action brought the computer system to a complete standstill and shut down business operations for 10 days.
This is an increasingly common story. Cybercriminals use phishing to gain access to the computer systems of businesses large and small through fraudulent emails.
Adopting good security practices, This link will open in a new window. to avoid cyber attacks is at the heart of entrepreneurs' concerns. The fact remains that in this digital age, all businesses are now one click away from a cyberattack.
Despite all the measures put in place to ensure the security of computer systems, cyber incidents are now a business risk. Cyber risk insurance could help you limit the costs, financial and otherwise, of cyber attacks that could affect your business.
What is cyber risk insurance?
Cyber risk insurance aims to minimize the financial consequences and disruption to your business operations resulting from cyber threats, such as an attack that blocks access to your computer system.
What she might cover
Cyber risk insurance could cover in particular the costs related to:
the services of a vendor for negotiation following a ransom demand and, if required, the payment of the ransom
to restore or reconstitute identity, lost or corrupted data or damaged software
to the defense in the event of legal proceedings
reputation management.
What she might not be covering
This type of insurance may include certain exclusions, in particular:
future financial losses
intellectual property theft losses
the costs of improving internal IT systems, including upgrades to security software
According to the Insurance Bureau of Canada, nearly half of SMEs (46%) that have experienced a cyberattack report that the event cost them more than $ 100,000 2. All types of businesses are exposed to cyber risks, but not all businesses are able to deal with them equally. Desjardins Insurance damage insurance agents are there to answer your questions. They can assist you in finding insurance solutions adapted to your reality. For more information on cyber threat insurance solutions, visit the Desjardins Insurance Cyber Risk Offer section.
Category Companies
Cyber Risk Insurance: Does Your Business Need It?
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23 Aug 2021
In this time of digital transformation, businesses are more vulnerable than ever to cyber risks. A very big major
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