Thursday, February 27, 2014

Cyber Liability: Four Components of Cyber Risk Management

If your business stores information and data electronically, it’s important to ensure that you have a program in place that addresses the four components of cyber risk management: prevention, disclosure, crisis management, and insurance coverage that will protect you in the event of a data breach. Let’s take a closer look at each of these four components.

Prevention: Develop a Plan to Prevent a Breach

cyber liability insurance nh
When developing a plan to prevent data breaches, it’s crucial to consider technology and education. In regard to technology, you may choose to encrypt all devices that your employees use, such as smartphones, tablets, and laptops, to prevent unauthorized access in the event that the device is lost or stolen. In many cases, cyber liability insurance does not cover unencrypted devices, so be sure to check with your insurance agent to determine whether you need to encrypt your company’s devices.

Another aspect that plays an important role in data breach prevention is education. Educate all of your employees about phishing and pharming scams, and make sure you remind them to never click on anything that looks even slightly suspicious.

Analyzing your cyber risks from both technological and educational perspectives will help you identify where you may have gaps in your security. Once you’ve finalized a prevention plan, be sure to revisit and revise it regularly, as new cyber risks are constantly emerging.

Disclosure: Know Your Responsibilities

Did you know that if you experience a data breach, you may be required to notify certain people? If your company is publicly traded, for instance, you must report cyber security incidents to stockholders, even if your business is only at risk of an incident, in order to comply with guidelines issued by the Securities and Exchange Commission. These guidelines advise timely, thorough and accurate disclosure about risks and incidents that would be important for investors or clients to know.
 
When releasing this information, it’s crucial to carefully consider how much detail should be disclosed. Notifying a larger group of people than required could cause unnecessary concern among those unaffected by the breach. In some extreme cases, you may be required to go beyond disclosing this information, and actually destruct or alter the affected data depending on its sensitivity.

Crisis Management & Response

When establishing your cyber risk management program, preparedness is key. In the event of a data breach, you will be expected to respond in a timely and appropriate manner, which is why it’s crucial to have an effective crisis management and response plan in place.

First, you will need to determine when and how the data breach occurred, what information was acquired, and how many people it affected. Next, evaluate the risks you face as a result of the breach, and how you plan to mitigate these risks. It’s important to keep your clients informed about your actions as you manage the crisis, while being careful to not disclose too much information. It’s best to focus on improving future actions to help rebuild trust among your clients and stakeholders.

If your company has in-house lawyers and an IT department, you should work with them while creating, reviewing, and revising your plan. This way, everyone will know their responsibilities and be prepared to act quickly in the event of a breach.
 
Protect Your Business’s Data with Cyber Liability Insurance

An important aspect of your cyber risk management program is cyber liability insurance coverage designed to suit your business’s specific needs. This type of coverage addresses the risks that accompany modern technology, which other types of commercial insurance policies typically do not cover. The amount of coverage your business requires depends on its individual operations and exposures it faces, so it’s best to work with an independent insurance agent who will take the time to assess your needs and help you secure the right coverage at the lowest possible rate.
At Hunkins & Eaton Insurance Agency in Littleton, NH, and Lisbon, NH, the protection of your business is our priority. To learn more about cyber liability insurance and how you can protect your business from a data breach, call us today at 800-427-3975 or visit us online at www.hunkins-eaton.com. You can also find us on Facebook, Twitter, and Google+.

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