Cyber liability is costing companies more, and cyberattacks are on the rise.

Cyber liability is a major concern for the retail and healthcare services industries, where client data – if compromised or lost – can be a very costly problem. In recent years, there have been an increasing number of costly cyberattacks against large companies, with retailers Target and Home Depot among the breached. However, smaller companies face cyber liability risks as well.Big or small, the financial impact of these online security breaches is staggering, with losses of nearly $10 billion anticipated in 2015, according to Insurance Market Source. The fact remains that virtually all businesses use information technology (IT) in some way — to communicate via email, to provide a service, to make a transaction, to store a consumer’s personal data and more. The trouble is that the Internet was built for connecting and speed, not for security. As more and more services and personal information move online, it opens up more opportunities to be targeted by hackers, who constantly scan the Internet for potential openings. How do you stay cyber safe? One example is the EMV technology used by credit card companies. Having data on multiple servers is sound, too. Data encryption is vital, as well as having secure authentication processes, perhaps involving multiple steps. And proving you are taking the cyber threat seriously and have the proper controls in place can give you more than peace of mind— it can help you get covered by an insurer and get a more favorable rate to boot.

For manufacturers, cyber attacks and the cyber liability they can create is a big concern, too, but it’s a different one than for retailers. One manufacturing cyber risk, for instance, is someone hacking into the software of the machinery and take over the machines. Via The New York Times, cyber attacks on industrial control systems increased by more than 300 percent from January 2013 to January 2014, according to data from Dell Security, with the United States a major center for these breaches. With cyber attacks costing retailers, health care companies and manufacturers significant losses related to their size, many are taking greater security measures to prevent the cyber liability fallout from crippling their firms. Even the U.S. Senate is taking up the charge, passing the Cybersecurity Information Sharing Act of 2015 in late October.

 

Want to learn more about insurance solutions to help promote cyber security in the face of a world where cyber attacks lurk? Contact The Plexus Groupe at 847-307-6100 (Chicago), 972-770-5010 (Dallas) or 405-241-9462 (Oklahoma City). You can also reach us on the Web at plexusgroupe.com.

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References

“3 Ways CHIP/EMV Technology Can Affect Cyber Liability.” Insurance Market Source, July 16. 2015.

Pelroth, Nicole. “Online Attacks on Infrastructure Are Increasing at a Worrying Pace.” The New York Times, October 14, 2015.