While many of the cyberattacks that get press are against high-profile entities or organizations, all types and sizes of business, including hotels and restaurants, are vulnerable to the sophisticated methods utilized by today’s cybercriminals – from phishing to ransomware and scareware tactics. Additionally, cybercriminals have upped their game with attacks rising consistently over the last 10 years and exploding in 2020 in the wake of COVID-19 and the disruption caused as so many workers went remote.
As a result of the continuing rise in both the frequency and severity of cyber losses, insurance rates are climbing. Some prices for at least 50% of insurance buyers went up 10% to 30% in late 2020, according to a survey cited by the U.S. Government Accountability Office (GAO). Some carriers are also reevaluating how much coverage they can afford to offer, depending on the insured’s risk profile and industry niche, while others are partnering with outside cybersecurity firms to vet companies’ protocols and security readiness when determining coverage terms and limits.
But without Cyber insurance, organizations leave themselves exposed to losses that could potentially shutter their doors or at the very least impact their bottom line and damage their reputation significantly. In fact, the GAO study shows that companies are increasingly opting to buy Cyber insurance even in the face of increased rates and coverage changes, realizing the tremendous risk to their continued success if they decide to go bare.
Get to the Root Cause of Attack, Help Prevent Future Hits
With Cyber insurance in place, if and when a breach or other type of attack occurs, your clients have a partner to dive deep to determine the root cause of the attack and its extent. The insurer employs forensic specialists to see where vulnerabilities lie and how to address them. Risk-mitigation strategies are also provided to help prevent future losses.
In addition, as part of the Cyber insurance program, a policy typically pays for the expenses to notify all those impacted by a breach.
Lean on Insurer to Navigate When Ransomware Hits
Ransomware has increased over the last few years and is among the leading types of cyberattacks against organizations. Ransomware involves cybercriminals and criminal syndicates that take over an organization’s computer network and demand a payment to hand back control. Hackers typically gain access by tricking employees into giving up passwords or downloading malicious code through “phishing” emails. Some cybercriminals are now even recruiting company employees, asking them via email to unleash the malware inside their employer’s network in exchange for a percentage of any ransom amount paid by the victim company. According to blockchain research firm Chainalysis, ransom payments from companies increased 341% to a total of $412 million during 2020.
The FBI advises victims to avoid negotiating with hackers, arguing that paying ransoms incentivizes criminal behavior. But this puts victims in a precarious spot – if they don’t pay, they can’t run their businesses. With Cyber insurance in place, organizations often have the assistance of ransomware-negotiation specialists with which insurance companies regularly partner to help people navigate the world of cyber extortion. The company is not left on its own to figure it all out.
Cyber insurance can also be designed to pay for crisis management and public relations expenses following a cyber incident. This is critical for an organization in helping with reputational management and instilling confidence in its customers. In addition, loss of income as a result of a cyberattack may be included to help offset the costs involved in the event a business is unable to operate for a specific length of time following a breach, ransomware, or other attack.
It’s important to discuss with clients these and other reasons for buying Cyber insurance even while carriers are looking for rate adequacy to maintain stability in this product line in order to continue to meet their obligations.
Distinguished Programs provides a comprehensive Cyber insurance program to the hospitality sector. Reach out to your Sales Executive for more information.