IE Business Daily Business news for the Inland Empire.
By Tim Kolacz
In an economy where we are looking at every dollar going in and out of our company, we tend to focus on the things immediately in front of us. Every day we read articles about Cyber Security, companies getting hacked, how Fortune 500 companies are doing and how our economy is moving. Economic movement, up or down, is relative to your location, especially here in southern California. We also see articles on current events and one current event that is just never going away is Cyber Security.
Recent articles written regarding the average cost of a Cyber breach have indicated that the costs are much lower than anticipated. These reports, such as one by Rand Corp., show that the average cost is about $200,000 and that “Relative to all the other risks companies face, the cyber risks often aren’t as big a deal as we think,” states lead author Sasha Romanosky.
That’s interesting. $200,000 is not a big deal? I find it difficult to believe that if the average company in America had a $200,000 uninsured loss, that they would think it’s not a big deal. We’ll get back to that in a minute.
Additionally, this same report indicated that for Fortune 500 companies that a major breach would cost the company less than 1% of their annual revenue. So I did a little Google-ing and found that the average revenue for a Fortune 500 company is just shy of $35 billion dollars. So 1% of that amount is $348 million dollars. $348,000,000. 348 extra super large ones. And this is revenue. Not profits. Even if your company is running at a 20% profit margin, are you able to take that kind of hit to your profits? Companies on this list most likely cannot as their stock price would drop like a rock, their total value would plummet and they would have to remove half their board of directors.
Sounds like a big deal to me.
So, back to my previous points, Cyber-attacks are real. They cost companies real money every day. You are (probably) not a Fortune 500 company; or are you? Busting your hind quarters every day to keep 5, 40, 100 employees happy and your company moving to sustained profitability. Can you afford to write a check for $200,000 if/when a loss occurs? Unlikely. Can you afford to have an evaluation of your risk of a Cyber-attack? You absolutely can. You know why? Because just like the beer that Bluto Blutarski is offering you, it’s free!
Call your broker, or your soon to be broker, and have them evaluate your risk. You only need spend the time gathering some information, have me review how you currently run your business, how you connect to the rest of the world and what safeguards you currently have in place.
At the end of the day, your true risk might be small, you may not even need a Cyber Liability policy, or it might just be the thing that saves your business one day.
Tim Kolacz provides the Right Solution for his prospects and clients. He can be reached at 951-779-8730 or at [email protected]. Plus and this is the coolest part, he likes his job and has fun every day.
