FIRST LINE OF DEFENSE
A common theme in my articles is that insurance funding is a last resort. Planning, or dollars committed pre-loss will significantly reduce your chances of a disruptive event.
“In preparing for battle I have always found that plans are useless, but planning is indispensable.” – Dwight D. Eisenhower
When your first line of defense is breached, you will be in a better position to mitigate the loss, contain costs, and return to normal business operations.
A Cyber breach can cost you hundreds/thousands of lost man-hours. The breach can be as disruptive as a major fire in your building. Without a plan, your recovery is measured in weeks and months, not days or hours.
SECOND LINE OF DEFENSE
Damage control. Notify the authorities and your Cyber insurance carrier.
My Perspective:
- Insurance carriers align themselves with national cyber forensic experts that can mitigate your loss.
- Insureds with dedicated IT staff can sometimes negotiate the use of a preferred vendor. The carrier has final say.
- Notify the FBI. It can reduce your loss by 85%, according to a 2023 report by ChainAlysis.
- The FBI transcends local and national boundaries, and it costs nothing.
- They have the authority to engage global resources for success.
- It will ensure your regulatory compliance.
NO ONE IS IMMUNE
Trucking firm – delivered 100k+ of goods based on a fraudulent purchase order.
College – their online admission system was subverted for a month – $500k.
Exclusive Nantucket Resort -online reservation system was compromised in their busiest season for 3 months – 1.6 mil.
Regional food franchise – 50+ locations were disrupted by parent company’s breach of their online ordering platform- 1.2 mil.
It happens, it sucks, and you are not immune. Global companies with dedicated IT security are shocked when they are compromised.
MY OBSERVATIONS
- The bad guys are a step ahead. The rest of us are plugging holes.
- Clients that suffer a Cyber Breach are shocked by the scale and magnitude of the impact on their business. Often scrambling for solutions after the event.
- Post-event, most clients up their cyber coverage and bolster their internet security protocols.
- With no plan, count on one week, under pressure to develop a plan and begin to manage the situation.
FINAL THOUGHTS
My primary role at IMA is to help clients with claims. I would prefer my salary to be allocated to pre-loss security rather than post-loss chaos. Either way, I will help. It is what I enjoy.
