Cyber risk is a significant concern for companies, often overlooked or brushed aside. However, measurements suggest it’s more probable and severe than other risks like product or premises liability. It’s a critical issue that businesses can’t afford to ignore.
Losing Control: The Escalating Cyber Threat
An article from the Financial Times highlights a troubling reality: the corporate world is losing control over cyber risk. This loss of control implies a situation spiraling out of hand, signifying a lack of effective measures to manage this threat.
Challenges in Acquiring Cyber Insurance
Securing reasonably priced cyber insurance that enhances resilience is proving increasingly unattainable. The challenge lies in obtaining coverage that’s both affordable and comprehensive enough to mitigate potential losses. For mid- or small-sized companies, exploring insurance rates becomes crucial to understanding the feasibility of obtaining adequate coverage.
Locking in Coverage: The Importance of Early Insurance
For companies able to secure even moderately reasonable policies, it’s advisable to lock them in. Establishing a policy allows insurers to gauge your risk, increasing the chances of retaining coverage during renewals. Delaying might lead to escalated prices or even denial of coverage due to being an unestablished risk.
The Value of Underwriting Insights
Even if rejection for coverage occurs, the insights from underwriters are invaluable. They offer reasons behind the rejection, outlining specific risk areas within your operations. Addressing these vulnerabilities can potentially decrease risks, making the company more insurable in the future.
Mitigating Risk: Beyond Insurance
Reducing risk shouldn’t solely hinge on insurance availability. Adjustments within operations, sales processes, or IT departments, driven by insights from insurance inquiries, can fortify the company against cyber threats. This proactive approach not only enhances insurability but also bolsters the overall resilience of the business.
Maintaining company control
Ultimately, losing control due to cyber threats could devastate a company. Being incapacitated by a cyberattack or substantial expenses can be irrecoverable. Therefore, understanding, mitigating, and managing cyber risks becomes paramount to safeguarding the company’s stability and continuity.