What if you discovered that all the hard work, investments, and time you’ve put into growing your business are at risk due to a failure of your outsourced IT company or in-house IT department? If you were exposed to that level of risk, wouldn’t you want someone to tell you?
In recent years, the severity of cyber security attacks has escalated significantly. These attacks are no longer considered a remote possibility that may cause minor disruptions. Organizations of all sizes and industries are falling victim to hacking incidents, resulting in substantial financial losses ranging from hundreds of thousands to millions of dollars. Moreover, these attacks inflict significant harm to a company’s reputation and customer trust. For the majority, the aftermath of such attacks represents a major financial catastrophe that can adversely affect profits and revenue for an extended period of time. CEOs and small business owners must take ownership of risk tolerance and compliance policies, instead of delegating them to the IT department.
Consider the scenario where an employee persistently disregards stringent data security and password protocols, and repeatedly fails to adhere to cyber security awareness training, thereby exposing the company to the risk of cyber-attacks and non-compliance. Should your IT manager or IT company terminate the employee or issue a warning? Is it within their purview to regulate employee conduct with respect to company data and devices? If the answer is yes, when was the last time you met with them to specifically address this issue and direct them on how to monitor and manage it?
While most CEOs acknowledge that the IT department should not be solely responsible for such decisions, they often still delegate them to the IT department or an outsourced IT company to decide what is allowed, what isn’t, how much risk they want to take, etc. Furthermore, a concerning fact is that numerous CEOs lack awareness of implementing policies to safeguard their company from compromise or risk.
As an illustration, numerous companies have made investments in cyber liability, ransomware, or crime insurance policies to mitigate the financial impact of a cyber-attack and cover the substantial legal, IT and associated expenses that arise from such incident. However, our experience indicates the majority of insurance agents and brokers lack an understanding of the IT prerequisites necessary to secure a policy, and are unable to communicate these requirements to the CEOs when they are selling the policy. Consequently, they fail to advise their clients to collaborate with their IT provider or internal IT team to ensure appropriate protocols are in place. Failure to have the proper protocols in place could result in coverage being denied due to non-compliance with the policy’s requirements.
In the event a cyber event occurs and the claim gets denied, whose fault is it? While it may be tempting to hold the insurance agent accountable for their failure to provide adequate warning, or the IT department for not implementing protocols they were not informed about, the ultimate onus lies with you as the CEO. It is imperative that decisions affecting the risk exposure of your organization are well-informed and deliberate.
Naturally, a distinguished IT company will proactively address these concerns and provide guidance. However, most IT companies merely focus on maintaining operational functionality and system stability, rather than actively advising their clients on matters of enterprise risk and legal compliance.
If you want to make sure your organization is prepared for and protected from the aftermath of a cyber-attack, click here to schedule a Discovery Call today! It’s free of charge and may be extremely eye-opening for you.
