While cyber insurance is a key coverage to consider, it should never be your only line of defense. Cyber risk outgrew the IT department over a decade ago and is now a systemic problem, and a top concern, for financial, legal, and operational business leaders alike. Here are the leading causes of cyber-related loss and why your business needs a broad, proactive risk management strategy to address today’s most common threats.
Ransomware tops the list for cybercrime loss.
In 2023, one ransom demand reached as high as $80 million. Fortunately, most ransom demands are closer to $3 million, with average payouts of around $700,000—but these figures are still substantial. And it’s not just about financial losses, for example, a ransomware attack that halts distribution could result in missed deliveries to retailers, while a data breach at a financial institution could result in regulatory fines and compliance costs.
Stay vigilant of “phishy” emails.
Business Email Compromise (BEC) schemes, a form of phishing for money or sensitive information, continue to exploit enterprise email systems and defraud organizations on a regular basis. This type of cybercrime presents a significant threat that has held steady for the past five years. As “bad actors” continue to succeed with social engineering tactics, businesses need risk management tools that go beyond tech solutions alone (e.g., multi-factor authentication). The most effective defense is often well-trained employees who can spot and respond to these threats.
Shield your business to keep hackers at bay.
While hacking remains the third leading cause of cyber loss, there is good news. The adverse financial impact of tech-savvy criminals gaining unauthorized access to your computer network or digital system is less severe than it used to be, with the average hacking incident costing about $55,000 in 2023—a 40% drop since 2019. A multi-pronged approach to system management and security will shield your business against vulnerabilities that hackers can potentially exploit.
Secure your transactions from wire transfer fraud.
Manipulating financial transactions to steal money remains a top cyber threat for businesses today. Companies of all sizes have fallen victim to wire transfer fraud but fortunately the average cost per incident has dropped significantly, from $302,000 in 2020 to $94,000 in 2023. Establishing a clear chain of authority and installing robust verification protocols can help mitigate risk from this form of cybercrime.
Beware of the increasing threat from third-party incidents.
Concerns about third-party incidents, whether malicious or not, are on the rise. While malicious incidents can be up to six times more costly on average, last year’s CrowdStrike event highlighted the increasing risks associated with third-party vulnerabilities in today’s interconnected business world.
Free access to cyber risk tools and resources.
While cyber insurance is essential in today’s business climate a broader, proactive approach to cyber risk management is critical. This is why Altus Partners offers all clients complimentary access to a cyber risk management platform—whether you purchase cyber insurance or not—
that provides essential tools to assess risk exposure, create a proactive response plan, develop policies and procedures, train employees, and test your defenses.
Seek objective advice for effective cyber risk management.
As the nation’s only 100% commission-free corporate broker, Altus Partners’ cyber risk management advice will always be unbiased and aligned with your needs and exposures. And you only pay for what’s necessary. Cyber threats are not going away anytime soon. But with the right strategies in place and the right insurance broker by your side, you can mitigate potential cyber risks and better protect your business.
Does your insurance program adequately address your business needs?
Altus Partners can help with your cyber risk management strategy and offers a complimentary analysis of your insurance program. We’ll evaluate your coverage needs, identify overages or gaps, and ensure pricing aligns with your best interests. Contact us or call 610-526-9130 to learn more about our unique approach to risk management and the value we can provide.
Source: NetDiligence® Cyber Claims Study 2024 Report: Summary statistical analysis of over 10,000 cyber claims for incidents that occurred during the five-year period 2019-2023 among businesses with less than $2B in revenue.