By: William Sholly IV
You have spent all your time and hard-earned capital building your widget factory. You have suitable machines, packaging lines, and the right workforce. You have built this factory from the ground up; your client base is rapidly expanding. You have made all the right investments and bought all the proper insurance according to your broker; everything is excellent!
Imagine one day you drive up to your great factory and see all your machines, packaging lines, workforce, and your most loyal customers, trapped in glasses boxes out front. They are within reach, but you are unable to release them. Then you notice standing in front of them is a mysterious character. You do not know their name, you do not know what they look like, and you do not know where they are from. Through a cryptic voice, you hear them say, “if you want your workforce, machines, lines, and customers unlocked, you will need to pay.”
You are a good person; you do not want to jeopardize your employees and clients or lose your factory! So, you give in to their demands and pay an outrageous price for things that are already yours!
What has just been described is a real-life scenario that happens daily in our digital world. On average, it costs businesses $84,000 to fully recover from a ransomware attack1. In general, ransomware and cyber-attacks are fast becoming the number one concern of business owners across the globe. So much so that companies forecast to increase their IT Security budgets by 53% this year2. Spending more on preventing an event from happening is always wise. Much like healthy eating, exercise and regular check-ups help to prevent serious illnesses. However, no matter how hard we train or how well we eat, we will all experience an accident or disease one day. All the preventative spending will not help once the rubber meets the road, which is why we purchase health insurance.
Along the same lines, it is vital to ensure we have solid checks and balances in the digital space for the health of our businesses. We want to ensure we implement the best IT systems, hire an impeccable IT Team, and offer best practices training to our employees. Unfortunately, they will happen no matter how hard we try to prevent accidents or attacks. In a 2022 survey of companies in Belgium, France, Germany, Ireland, Spain, The Netherlands, United Kingdom, and the United States, 48% reported a Cyber Attack in the last twelve months3. Much of this can be attributed to the events surrounding 2020; it dramatically changed how we work and, more importantly, where we work. As our physical office space is shrinking, our online digital footprint is growing exponentially. According to Travelers, since the start of the Covid-19 Pandemic, businesses with 40% of their employees working remotely has more than doubled.
Here at Seltzer Group Partners, much like any qualified risk manager or insurance agent, we believe there are four ways to manage risk:
Any agent can provide a cyber policy written up by any number of carriers. Sometimes, a unilateral approach may be appropriate, but often, there is a multi-prong approach we like to take here with our clients. We have cultivated partnerships with local and national cyber security firms. You don’t know what you don’t know, and partnering with cyber security and recovery experts is a must. In addition, we are working tirelessly with our insurance company counterparts to stay at the forefront of this emerging insurance.
One of the latest requirements many companies are struggling with is Multi-Factor Authentication (MFA), also known as Two-Step Authentication. We all have financial and banking apps on our phones that fire off a text message to verify it is us trying to log in to our accounts. Many insurers require a similar format to be applied to our proprietary and client information within our businesses. Often as a business owner, you do not know where to begin! This is why we have teamed up with experts in the cyber field to help guide our clients if they do not have an IT Team or to assist their Team, as this is often a heavy lift for one organization.
In conclusion, the world and how we conduct business is rapidly evolving. It is more critical now than ever to be sure you have the right cyber security team, protocols, and insurance in place.