Wednesday, June 22, 2016

The Unexpected Strategic Benefits of Cyber Insurance

James McFarlin

Managing any organization's cybersecurity risk in today's environment of rampant cybercrime has become a critical management responsibility in organizations of all sizes.

Recent organizations experiencing major losses from cybercrime include the IRS (700,000 tax returns), Anthem Healthcare (100 million+ health records), even the NY Federal Reserve, which had $81,000,000 stolen from its customer's accounts in February.

According to the US Chamber of Commerce, businesses with fewer than 100 employees experience 71% of all cybercrime attacks. This is due to the relative ease of breaching organizations that many times do not make the investment in cyber defenses and employee training.

Ransomware, the current cybercrime method of choice, is up ten-fold in the first quarter of 2016 over the 2015 period. Recent ransomware targets include hospitals such as Hollywood Presbyterian in Los Angeles, city governments and even police departments.

Protection comes with a cost. But the consequences from a breach or scam can be vastly greater and can place the viability of the business in jeopardy.

For perspective on this topic, I turned to Cybersecurity insurance expert Roberta Anderson, partner and head of the cybersecurity practice in the Pittsburgh office of the global law firm K&L Gates.

"Recovery from data breaches is a time-intensive, distracting and resource-consuming process that impacts not only the operation of the organization but potentially its relationships with customers, suppliers and financial partners.

"Every organization has its crown information jewels, whether it be customer data, financial records, or proprietary business tools. These must be protected. Seeking to limit their losses following attacks, many organizations are investigating cyber insurance as a means to help them recover and to maintain financial viability.

"Cybersecurity is becoming increasingly recognized as more of a management and organizational cultural issue than a technology issue. The four words that cause cyber vulnerability more than anything else are 'Cybersecurity is IT's problem.'"

Clearly, cybersecurity events will happen. What is essential is to plan for them so they do not take you down if they occur.

Ms. Anderson added, "One of the true values of evaluating cyber insurance is that it causes the organization to look at cybersecurity practices, network protections, data backup and employee training - which in turn actually reduces their risks because of the increased awareness and planning. Management ends up with a roadmap for improved cyber security. This alone is worth the cost of the insurance."

Smaller firms, she emphasized, should sit down with their insurance agent, look beyond their general liability policies and evaluate cyber coverage: "The risks of not providing financial cushion from cyber intrusions are simply too high for most small organizations to deal with successfully."

The net-net of the conversation with Ms. Anderson: "Those with cyber insurance benefit from both a greater peace of mind and improved cybersecurity practices. These are gifts most do not expect but which many receive."


  1. Thanks for sharing your information, its great and i appreciated about it!
    kumpulan video bokep
    gambar mesum
    video bokep hot

  2. Low cost medical insurance should be opted for after going through all the terms and conditions. There are many visitors insurance plans that we offer at competitive rates. Progressive Insurance Brandon FL

  3. This also depends on the benefits provided by the company and on the deductibles that starts off at $250 and can go up to $5,000.
    Smart Medigap Plans

  4. This article is an appealing wealth of informative data that is interesting and well-written.
    aia takaful

  5. Most effective to help keep Life Insurance Chico Uncomplicated! Although it could possibly be temping to make extra revenue by investing, keep in thoughts that you are getting life insurance Chico to take care of your loved ones in the unlikely event of the death. Group retirement

  6. The essential features of life insurance are a) it is a contract relating to human life, which b) provides for payment of lump-sum amount, and c) the amount is paid after the expiry of certain period or on the death of the assured. insurance dashboards

  7. Organising a policy in this way can save a business money if vessels are the only items to be insured whilst in transit. low car insurance

  8. The explanation behind this is frequently a c-mount camera can be repositioned in a security setup that has changed essentially by purchasing another focal point as opposed to buying another camera. best home surveillance cameras

  9. You delivered such an impressive piece to read, giving every subject enlightenment for us to gain information. Thanks for sharing such information with us due to which my several concepts have been cleared. money leading

  10. I need perusing and I consider this site got some genuinely helpful stuff on it! andy michael

  11. It is interesting to read your blog post and I am going to share it with my friends.aybabg

  12. Hi! I'm going along with my buddies and you will find just four of us. I would like to ask if there Car Covers are not any additional charges for exceeding a limitation also knowing the capacity of adults in 1 tent. Hope to hear a response from you.

  13. Similarly as with the spy camera pens when you go to purchase a couple of these spy glasses you should make a point to get a couple that is ensured to have a long battery life and will take astounding pictures. Cassy

  14. py cameras have made some amazing progress from the shoulder-mounted or shut circuit TV behemoths of days passed by.

  15. This makes users switch the service provider, and it acts as a minus point for any business. You all must have come across the word of mouth or viva voce advertising, which experts consider as one of the greatly effective ways to influence business' brand door security Abilene

  16. This comment has been removed by the author.