Cyber Insurance Vital to Risk Management

Business owners can handle risk management in a couple of ways. They can reduce their exposure to risk as well as invest in insurance to protect their assets against risk exposure once it occurs. Reducing contact with known risks can reduce insurance rates as well. A company’s best line of defense is to mitigate risk to avoid expensive insurance claims; however, it is unrealistic to assume a claim will never happen.

Failing to invest in insurance is an ill-advised business practice and poor risk management. While many business owners do not intentionally overlook insurance, many are not aware of the coverage they need. For example, many businesses lack the proper coverage for cyber incidents. This is an issue as cyber insurance is necessary to controlling cyber threats. Technology in the workplace will continue to flourish, as will the associated risks. Businesses that collect customer data such as medical records or credit card numbers face a heightened risk of cyber attacks as they possess highly sought after and lucrative information.

Employee Negligence Limits Insurance Protection

More often than most would like to admit, employees fall for cyber tricks that result in a data breech. Some insurance policies only go into effect for unauthorized breeches. If a breech occurs due to employee negligence, the policy may not provide coverage. Smart business owners will train employees to recognize threats and risks as well as how to avoid them. Some examples include:

  • Never leaving laptops open and unattended
  • Creating strong passwords
  • Recognizing phishing email scams

Businesses need to consider all angles of exposure for effective risk management. The Reilly Company can help businesses identify the unique risks to their industry and develop a proactive strategy to defend against them. To learn more, contact us.

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