Cyber risk is ubiquitous and the threats to businesses are growing in severity. This week, tech journals issued an alert that a particularly virulent form of ransomware is being delivered as a critical update to Windows 10. It’s distributed via phishing emails from a fake Microsoft email address with a message subject of “Install Latest Microsoft Update now!” or “Critical Microsoft Windows Update!” Tom’s Guide reminds us “to always distrust any emails you get, even if you think they come from a trustworthy source, and never blindingly click on something you didn’t ask for — even if you have the best antivirus software installed. You never know when the next malware will hit.”
You and your agency might escape this particular threat, but the danger is real. To be safe, you have to bat .1000. Being wrong just once can be calamitous. Ransomware attacks significantly up the stakes for everyone, freezing your data and shutting your operations down. From an insurance standpoint, cyber was previously considered primarily a third-party risk for covering data breaches, but the real and growing threat is in direct, first-party losses. And if you think your agency or your agency’s small business insureds are too small to be in the line of fire, think again. A report from Beazley Breach Response Services said that about 70% of the attacks in 2018 targeted small businesses, with an average ransom demand of $116,000.
Problems offer growth opportunities
But with every problem comes opportunity, as Renaissance Alliance CEO Bruce Cochrane discusses in his article Cyber Risk: The best opportunity for Independent Agents since the invention of the automobile, published in the November 1 issue of The Standard.
Because cyber risk is pervasive and no business is immune, it offers an enormous growth opportunity for savvy insurance agents.
In the article he notes:
Liability is just the hole in the donut of the threat that cybercrime presents. The enormous, incalculable exposure that can bring a business to its knees is in direct, first-party losses; the loss of or damage to data (property), the inability for a business to conduct its business (business interruption) and cyber extortion (crime). Liability exposures are just the tip of the proverbial iceberg. Yet today, 90% of the solutions agents offer to their clients address third-party exposures (Cyber Liability).
The real solution is a comprehensive cyber package protection: coverages that address the four primary exposures: property loss, business interruption, crime for theft and extortion and liability. Cyber Liability simply isn’t the solution – it’s like buying one leg of a four-legged stool and trying to sit on it. Our clients need the whole package.
Download the full article: Cyber Risk: The best opportunity for Independent Agents since the invention of the automobile
Reprinted with permission by Standard Publishing.