Let’s start with the silver lining: high-profile cyber security events and security breaches in recent years have sparked a land rush within the business community to improve their security posture, with one report projecting worldwide information security spending to exceed $1 trillion over the next five years.
Unfortunately, not all IT security budgets are created equal, with only 14 percent of small and mid-sized companies reporting that they can effectively mitigate cyber risks and attacks. It’s not all bad news for small and mid-sized firms, however. Access to enterprise-level IT security can actually be attainable by working with a managed technology provider, who can spread the cost of the multimillion-dollar technology investment across many customers. This type of service, if from a reputable provider, can include certified professionals managing your business’s data, computing, and storage infrastructure within a fortified data center.
But with much of our attention rightly focused on IT security posture, there is a big, important piece that businesses are largely ignoring – the one piece that can actually save your business if a major cyber event or security breach were to occur: cyber insurance.
With up to 60 percent of small companies going out of business after suffering a cyber attack, and up to half of all small and mid-sized businesses actually experiencing a breach over the past twelve to eighteen months, having insurance coverage for a cyber-related event could be the difference between staying in business for the long run and succumbing to fees, fines, and legal costs.
A recent report tells us that an alarming 50 percent of U.S. firms do not have cyber insurance. This type of coverage can be surprisingly affordable, and can help cover many costs beyond legal fees, including a forensics investigation into the cyber event and notifying customers – which many states now require.
At the end of the day, today’s businesses not only need to have a real plan to protect their data – whether that’s making the appropriate investment in IT security or by selecting a technology partner to help with the heavy lifting – but also have a serious plan to protect the business if (and when) a cyber attack and breach does occurs.
Newtek Technology Solutions is a premier managed technology provider that works with organizations small and large to help reduce IT costs and minimize security risks. Newtek Insurance Agency is a 50-State licensed insurance solutions provider that specializes in all commercial insurance coverages, including cyber and breach insurance.