When you think about the typical causes of business interruption, natural disasters such as fires, earthquakes and floods probably come to mind first. These events can cause physical damage to your property and equipment, making your workspace unusable for a time. Hurricane Ian is a great example of how a natural disaster can put a halt to the day-to-day operations of a business. Many businesses by Hurricane Ian remain closed to this day.
While natural disasters are still the main cause of business interruption, another issue is quickly moving up the ranks: cyber-attacks. As businesses continue to rely on computers and digital storage of essential data, cyber-attacks will become an even greater risk to your business. Read on to learn how a cyber-attack could lead to a business interruption and what you can do to mitigate the risk.
How a Cyber-Attack Causes Business Interruptions
Hackers, thieves, and other unauthorized individuals have become adept at exploiting weaknesses in a business’s computer system, whether through traditional hacking methods or social engineering. There are several types of attacks that could completely cripple your ability to perform normal business activities, including:
- Malicious code that renders your website unusable
- Distributed denial of service (DDoS) attacks that make your website inaccessible to employees and customers alike
- Viruses, worms or other code that deletes critical information on a business’s hard drives and other hardware
It is quite easy to see how any of these events might leave your company scrambling to do business. Unfortunately, many smaller businesses don’t have the capacity to detect the problem and fix it, which only increases the length of an interruption.
Third-party Interruptions
You can still be affected even if it isn’t your business that experiences a cyber-attack. Imagine what would happen if one of your vendors suffered an attack, resulting in a complete shutdown of its warehouse or website. Attacks on third parties are often out of your control. However, such an event could have a profound effect on how your business operations, which could also trickle down to your customers, who rely on your products or services.
Ways to Prevent a Cyber-Attack
A common saying in the cyber security world is, “It’s not if you’ll be a victim of a data breach, but when.” While 100% protection is impossible, you can help reduce the chance that a cyber-attack will interrupt your business operations by following these tips:
- Create a formal, documented risk management plan that addresses the scope, roles, responsibilities, compliance criteria and methodology for performing cyber risk assessments.
- This plan should include a characterization of all systems used at the organization based on their functions, the data they store and process and their importance to the organization.
- Make sure all firewalls and routers are secure and kept up to date.
- Implement a cyber security policy that educates employees about the dangers of computer intrusions and how to prevent them.
- Download and install software updates for your operating systems and applications as they become available.
- Implement a strict password policy and have employees change system passwords every 90 days.
- Limit employee access to company data and information, and limit authority to install software.
- Make sure you are covered by a cyber liability insurance policy – learn more about cyber insurance here.
How Cyber Liability Coverage Can Help
Most traditional commercial general liability (CGL) policies do not cover financial loss from business interruption due to a cyber event. The good news is that cyber liability insurance can fill that void. Should your business be unable to perform normal business operations, a cyber liability policy can help pay for expenses related to an interruption. The coverage pays for:
- Lost income due to the event
- Profits that would have been earned had the event not occurred
- Operating expenses, such as utilities, that must be paid even though business temporarily ceased
- Rented or leased equipment
Cyber liability coverage can also help protect your business from the following events:
- Data breaches, including costs for customer notification, some legal costs and credit monitoring for those affected
- Damages to third-party systems, if, for example, an infected email from your servers crashes the system of a customer or vendor
- Data or code loss due to a natural disaster or malicious activity (physical losses are covered on a different type of policy)
- Cyber extortion, including ransomware, which is malicious code installed into a computer on your network that prevents you from accessing it until a ransom is paid
How RMC Group Can Help You Protect Against a Cyber-Attack
RMC is here to help you navigate this complex landscape and find the right coverage to safeguard your digital future. We have multiple insurance agents on staff who can perform a risk review of your business and help you find the right cyber liability coverage to meet your needs. Our risk review includes a detailed analysis of your existing insurance policies looking for any possible gaps in coverage and offering solutions. We’ll also identify emerging risks that your business may face and help you evaluate your risk priorities, including cyber threats. During this review process, we will also evaluate your employee benefit and retirement policies. Our risk review goal is to provide your company with solutions that better align with your business goals. To learn more about the risk review process, click here.
Even though business interruptions due to cyber-attacks may be less common than interruptions due to natural disasters, being unprepared for one could prevent you from doing business as usual. Contact RMC Group today to find out how we can help you avoid a business interruption by calling us at 239-298-8210 or emailing us at rmc@rmcgp.com.
