Cyber Risk. It’s a term that many businesses and companies believe they understand and have managed, but do they really?
Most companies and businesses look at Cyber Risk as mitigating immediate financial losses when a cyber attack happens. They fail to see the broader picture of lost potential revenue, liability issues, and long-term reputation damage to their brand. If a business views Cyber Risk as strictly an Information Technology issue, they are not seeing the bigger picture of how much Cyber Risk can truly cost their business and their customers.
Insurance, something that many companies are now considering or have already purchased, isn’t the answer to managing Cyber Risk if the company or business can’t quantify what their potential losses could be. Theft of private customer data or intellectual property can result in immediate losses, but the publicity surrounding those losses can harm the future viability of a company or business far more than immediate revenue losses.
To properly manage Cyber Risk, companies need to be able to assess their vulnerabilities, including those of their customers and business partners, mitigate larger cyber threats to their business data, and then find a way to quantify other risk factors that could harm future revenues. Those other risk factors include costs related to fixing the data vulnerability, regulatory fines, legal costs, forensic and consulting services, and marketing costs to rebuild their brand reputation after a cyber attack that compromises data security or revenues. Unless these additional costs are factored into the cost of a cyber attack, the insurance purchased by a company may not provide enough coverage to ensure that a cyber attack’s costs are fully covered.
When a business or company considers all the above factors and has quantified its potential losses accurately, that company is practising good sound Cyber Risk Management.
Source: Carrier Management