With all the media buzz the last few years focusing on cyber attacks, just how prevalent do you believe these attacks are today?
Consider this, last October, the FBI Director, James Comey, appeared on CBS's 60 Minutes and said this:
“There are two kinds of big companies in the United States… those who have been hacked by the Chinese and those who don’t know they’ve been hacked by the Chinese.”
And just because we might not be considered a ‘big company,’ it’s unrealistic for any business to believe in today’s digital world that we’re immune from an attack.
In fact, a survey conducted by the Ponemon Institute found that over the last five years, the number of successful attacks has risen to an average of 138 per week.
They also found that the average annual cost of responding to a single cyber-attack was $12.7 million, up 96% over the past five years.
The growing number of attacks and costs are staggering – for companies of all sizes. As a result, companies are finally starting to dedicate resources to prepare for cyber-attacks. However, it’s possible they may be overlooking two key exposures:
Expenses from a cyber-attack can quickly add up.
- Internal audits may need to be conducted
- Hardware and software upgrades may need to be installed
- Forensic examiners may need to be hired, as well as lawyers, security consultants and public relations firms
- Let's not forget the expense of credit monitoring that companies need to provide their affected customers
Most small businesses aren’t equipped to handle this process on their own, requiring outside assistance. Those costs would quickly add up, and could be devastating to your business.
While internal audits, hardware and software upgrades, and payouts to customers whose personal information has been exposed can be costly, those costs can quickly be dwarfed by the damage a cyber-attack can do to a company’s reputation.
If you were to calculate the net worth of your company, how much is the reputation of your brand worth?
Successful brands are built over time with investments totaling millions, sometimes even billions of dollars. They are built upon trust and performance; there’s often an invisible promise that every customer has with their brand of choice. When that promise is fulfilled, support, loyalty and brand equity occurs.
When that brand promise is broken, however, trust comes into question and the damage to the brand’s reputation is immense.
The intent of a cyber-attack is to steal intellectual property or data to produce financial gain for the attacker whether through extortion, or sale of the confidential information.
Often is the case when these attacks occur, they create an environment of chaos and economic disruption.
A cyber-attack produces constant media coverage and analysis about the potential damage and impact of the attack. This firestorm causes negative publicity, and very likely a hemorrhaging of the brand’s customer base.
The result – a huge loss of revenue and a tarnished reputation that’s difficult to put a specific dollar amount on, but it’s certainly a negative consequence.
The dark side of social media
Unfortunately, with today’s heavy usage of social media sites like Facebook and Twitter, this medium poses another huge threat to your company’s reputation.
In the event of a data breach, traditional media coverage, blog posts and consumer reaction to the breach will dominate discussion of your company’s brand across social media platforms.
Social media newsfeeds spread instantaneously and offer little to no distinction between legitimate news, biased reports, rumors and outright falsehoods, making the problem even worse.
For example, imagine that you’re trying to respond to a data breach through all the proper media channels and someone posts a comment on Facebook that says your company is withholding information about the breach. That post is shared over and over again, and hundreds of comments follow.
How do you dispel that rumor?
How do you reach out to all those who may have seen it?
How do you even begin to measure the damage to your reputation that you have worked so many years to earn?
Additionally, social media is the perfect battleground for a competing interest to launch an attack on your brand. In fact, some predict that the deliberate spread of false information about companies could be part of the next wave of cyber-attacks launched by foreign governments.
Curious about what you can do to prevent Cyber Crime?
The process of maintaining or rebuilding your reputation after an attack could be extremely costly. Notifying customers, keeping them updated about the situation and helping them deal with repercussions are all part of the process.
In addition, you may need to hire a public relations representative to manage all the press and even constantly monitor and dispel any rumors on social media sites. This process, while expensive, is absolutely necessary to protect your reputation and can all be covered under a quality, comprehensive Cyber Liability Insurance policy.
Recently, a top ranking representative of the House Intelligence Committee said:
“Cyber-attacks will be the warfare of the future.”
Are you prepared
Do you have a cyber security plan in place to respond to the inevitable breach?
It’s no longer a question of IF your business will suffer from a data breach, but when.
The amount of revenue lost can be devastating, but the undetected damage to your reputation could have an impact years after the breach, and could ultimately determine the success or failure of your business.
However, there are ways to limit your exposures and to cover losses.
We recommend that you find an Insurance Advisor that specializes in Cyber & Data Breach Liability Insurance that you can trust.
The level of coverage your business needs is based on your individual operations, and can vary depending on your range of exposure. It’s important to work with your Insurance Advisor to identify your areas of risk, and customize a policy to fit your unique situation.
If you’d like additional information and resources, we’re here to help you analyze your needs and make the right coverage decisions to protect your operations from unnecessary risk. You can download a free copy of our eBook, or if you’re ready make Cyber Liability Insurance a part of your insurance portfolio, Request a Proposal and we’ll get to work for you.