Businesses of every size play the odds against cybercrime, whether they know it or not. For instance, nearly one out of every two businesses surveyed by Hiscox were attacked by cybercriminals. Some businesses understand those odds can be moved in their favor. They spend time and resources increasing their probabilities to succeed while mitigating their probabilities of large or catastrophic risks with strategic, intentional actions. Other organizations, unfortunately, don’t have a dedicated, proactive plan and instead react day-by-day to the onslaught of existing projects — in favor of addressing clear and present threats. All organizations need a strong defense that is worth its weight in gold. Accordingly, cybersecurity insurance cost is a critical and necessary spend for your organization. Unfortunately, it’s also overlooked by most businesses:
- In 2020, the worldwide cyber insurance market was worth approximately $7.8 billion and projected to more than double to $20 billion by 2025.
- The median cost to a business for a cyberattack is approximately $18,000 per occurrence, according to Hiscox.
- Three out of five small businesses file for bankruptcy within six months of a cyber attack.
- Cyber crime not getting cheaper. In 2022, organizations spent 60% more on cybersecurity than they did the previous year.
It’s clear that being ready for a statistically probable cyberattack is good business. But how can you really know your organization’s cyber state of readiness?
What Is a Cybersecurity Risk Assessment?
Why do companies conduct cybersecurity risk assessments? For the same reason banks conduct tests on their security systems … to test for weaknesses and mitigate any outstanding risks. The hard truth is that bad actors are constantly seeking out vulnerabilities in your organization’s digital security. If your organization or your trusted strategic partner is not making strides to keep ahead of the latest cybersecurity threats, your whole company could be open to massive risks. According to the IBM:
- The average cost of data breaches in 2022 was $4.35 million.
- Health care industry breaches were the among the most expensive at $10.10 million on average.
- Approximately 43% of cyberattacks target small to medium-sized Businesses (SMBs). Unfortunately, less than one in five of those businesses are ready to defend against them.
- According to the World Economic Forum, cyberthreats are outpacing their targets’ ability to prevent and manage them.
- Even though major, highly sophisticated cyberattacks tend to be state-sponsored, other criminal organizations will eventually attempt to replicate the attacks for their purposes, multiplying the potential damage.
The primary purpose of a cybersecurity risk assessment is to see just how capable your organization is to defend against likely and outlier risks. It’s designed to help your team identify, assess and prioritize risks to your information infrastructure. The cybersecurity risk assessment results can then be used to help key decision-makers deploy resources to mitigate or eliminate those risks.
Many cybersecurity risk assessments are based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework. It provides a strong basis for a structured approach to identify key risks and prioritize them in order of threat levels. Here are the NIST Cybersecurity Framework Key Elements:
- Identify: Seek out your organization’s baseline risks to systems, team members, assets, data and capabilities.
- Protect: Create defensive protocols to keep your organization’s vital infrastructure operational.
- Detect: Set up a system to alert you of any occurrences of applicable cybersecurity events.
- Respond: Take specific, predetermined and highly effective actions in the event of a cybersecurity event.
- Recover: Implement a set of activities to restore and repair any damaged services or systems caused by a cybersecurity incident.
Cybersecurity risk assessments aren’t just a one-time solution. Technology threats evolve. The accessibility of artificial intelligence (AI) and machine learning to the general public — like the remarkably popular ChatGPT — has never been so widespread. According to Blackberry Global Research, 71% of 1,500 IT decision-makers from North America, the U.K. and Australia believe that foreign states may already be using ChatGPT AI technology for malicious purposes against other nations. Furthermore, BlackBerry Global Research also shows:
- 53% of IT decision-makers believe ChatGPT will be used to craft “more believable and legitimate-sounding phishing emails.”
- 49% of IT decision-makers believe ChatGPT will help less experienced cybercriminals improve their technical knowledge and develop more dangerous cyber skills.
Now, more than ever, cybersecurity risk assessments are key to identifying and eventually mitigating your organization’s digital risks.
Cyber Insurance: The New Fire Insurance
With the probabilities clearly leaning to the odds of an attack, cyber insurance becomes a no-brainer. The odds of your organization being involved in a physical commercial fire has decreased slightly over the last few decades. There are approximately 32.6 million businesses in the United States, according to the Small Business and Entrepreneurship Council (SBE). However, only about 100,000 commercial fires occur annually. That’s roughly a one in 325 annual chance of being affected by a commercial fire. Yet fire insurance is required by every major office space provider. As previously mentioned, the odds of a cyberattack are much, much greater (nearly one in two!), but the percentage of businesses with cyber insurance coverage for cyberattacks greater than $600,000 is less than 19%. Approximately only 55% of organizations claimed to have any cybersecurity insurance at all.
Cyber insurance can be as comprehensive as you need it to be:
- Data Breaches: It can cover your organization for data breaches covering the costs of litigation, recovery and identifying them.
- Business Loss: It can reimburse your organization for potential lost revenue.
- Ransomware: Also known as “cyber extortion,” cyber insurance can help your organization recover costs related to this increasingly common cyberattack.
- Forensic Support: Comprehensive cyber insurance can also help your organization with reimbursing you for costs related to a forensic investigation of the attack itself.
Get Your Assessment
Cyberattacks have real-life consequences. Tallahassee Memorial HealthCare (TMH), serving a 21-county region in North Florida and South Georgia, had to go offline and stopped its nonemergency procedures and diverted patients who required emergency medical services (EMS) to other hospitals because of a cyberattack. Cybersecurity risk assessments can protect your customers, your organization and your ability to function properly. A comprehensive and well-implemented assessment can also reduce your cyber insurance premiums. It can be extremely costly to your bottom line and your reputation to ignore the benefits of conducting a cybersecurity risk assessment. Take action now. Work with a trusted strategic partner to upgrade your cybersecurity and your peace of mind.
Marty Aquino has been a passionate writer on venture capital, technology, forecasting, risk mitigation, wealth and entrepreneurial topics since 2009. He is the founder of Carbonwolf Energy, a venture-capital firm specializing in world-changing and status-quo-defying technologies and people.
- Security.org — Cyber Insurance Statistics
- Hiscox — The Hiscox Cyber Readiness Report 2022
- Fundera — 30 Surprising Small Business Cyber Security Statistics
- LendingTree — The Percentage of Businesses That Fail and How to Boost Your Chances of Success
- OpenAI — Introducing ChatGPT
- TechTarget — 34 cybersecurity statistics to lose sleep over in 2023
- IBM — Cost of a data breach 2022
- NIST.gov — Framework for Improving Critical Infrastructure Cybersecurity
- Blackberry Global Research — ChatGPT May Already Be Used In Nation State Cyberattacks, Say IT Decision Makers in BlackBerry Global Research
- SBE Council — Facts & Data on Small Business and Entrepreneurship
- EPS Security — Five essential fire statistics for business owners
- Network Assured — 23 Eye-Opening Cybersecurity Insurance Statistics (2023)
- Bleeping Computer - Florida hospital takes IT systems offline after cyberattack