Cyber liability risk management – Not Just For Large Companies
Dan Levenson April 26, 2021
As a small business owner, the last thing you need on your plate is to become a victim of a cyber-attack or breach. Unfortunately, cyber-attacks and data breaches are becoming increasingly commons, and dealing with an issue is always simpler if there is a plan in place. According to a US Small Business Administration survey, small businesses cannot afford the same level of cyber defense as larger companies, which makes them more vulnerable to an imminent attack.
What is Risk Management?
Risk management encompasses the identification, analysis, and response to risk factors that form part of the life of a business. Effective risk management means attempting to control, as much as possible, future outcomes by acting proactively rather than reactively. Therefore, effective risk management offers the potential to reduce both the possibility of a risk occurring and its potential impact. (CFI.com)
Effective risk management comprises a plan of proactive measures that will minimize exposure and create a safety net in case the proactive measures are compromised. Working with a trusted partner that can provide a risk management plan and a safety net is the ideal situation. At Insureyourcompany.com, we have the knowledge, expertise, and ability to help develop a plan for your business and provide insurance as a backup should it be needed.
All companies handle various types of sensitive and personal information ranging from just contact information to private financial data. The era of instantaneous communication and the ability to conduct business digitally has made everyone’s job easier and increased productivity to unimagined levels. This ability has also created the potential for companies to be infiltrated more easily. The days are over where you had to break into a building to steal an asset. Now, a criminal can sit with a laptop or cell phone and do vast amounts of damage without leaving a trace.
Steps to Successful Risk Management
- Identify existing risks— Identifying your existing risks is accomplished by gathering information from all levels and areas of your business. Speak with your employees and use their experience and understanding of their niche to build a big picture. Compiling this information and then sharing it with a risk management professional is vital.
- Assess the risks— Once the risks have been identified, they need to be assessed in how and why they have become actual risks. Are there loopholes that need to be closed? Is sensitive information too centralized? Smaller companies that have grown quickly are often a victim of that growth in that growth takes precedence over risk management. Companies need to take an honest look at where they are, how they got there and, what they do better going forward.
- Develop an appropriate response— No risk management plan will be perfect and create an impenetrable cocoon of safety. A vital part of an effective risk management strategy is how to handle a failure or breach.
This is done on a few levels:
- Look at a breach as a learning opportunity, rather than a failure. Discuss what measures can be taken to prevent the same risk from happening again, and
- Have a plan of action in place that will effectively mitigate any damage.
- Develop preventive mechanisms for identified risks– Developing a check and balance system that can prevent an identified risk from happening is an important goal. Prevention may take a lot more time and effort, but it can literally save a company from ruin.
Insurance is an important aspect of your risk management planning. While not all perils can be completely prevented, Cyber Liability, Professional Liability, and General Liability insurance can help protect your business. Contact Insureyourcompany.com for an assessment of your needs today.