How Dangerous Are Cyber-attacks?
As a business owner, you really can’t afford to find out what the technical or financial impact of cyber-attacks could be to your business.
Did you know that ransomware (a type of malware that targets critical systems and information for the purpose of extortion) attacks happen daily?
In fact, since 2016, there were 4,000 attacks happening every day, which targets everyone from home users to businesses, to government networks.
As a result, critical data is lost, regular operations are disrupted, financial losses are incurred to restore files, and the people lose confidence in your business.
Surely, you don’t want that to happen.
This really makes you wonder: how dangerous are cyber-attacks?
They are dangerous enough to take very seriously.
Loss Or Damage To Electronic Data
Ransomware is just one of the many types of cyber-attacks. Whether the attack involves a hacker, phishing, or a virus, one thing is for sure: you either lose or damage vital electronic data.
If you are a business owner, there is a possibility of losing sales records or contacts of suppliers, which can be detrimental for your business. If you are a freelance worker, then you could lose files needed for your work, which may take time to be recovered.
That’s just the small picture.
On a wide scale perspective, cybercriminals could trigger a breakdown of systems in the society.
Additional Expenses Are Incurred
Cyber-attacks have a domino effect.
Once you are subjected to an attack, you lose or damage vital information. You might even have computers that are unusable for a moment until you are able to restore them. Nonetheless, you need to keep the business up and running, which means you need to pay for data recovery assurance services, hire someone to make necessary repairs, or rent laptops just to maintain “business as usual.”
Let’s say you became a victim of ransomware. Since the purpose of extortion, you will be asked to pay a certain amount, say $10,000, in exchange for an electronic key that allows you to recover important data.
All of these require additional costs, which could affect your business.
When was the last time you set aside a budget for being held hostage by a cyber-criminal?
Loss Of Income Is Inescapable
At this point, the domino effect continues.
You’re already incurring additional expenses, which could affect your cash flow. Sadly, these expenses cannot be passed on to your clients by raising the prices of your product or service.
That’s not all. The cyber-attack could cripple a part of your normal business operations. You are unable to work 100 percent or you may be forced to temporarily stop the business until you are able to recover the data lost. A shutdown even for a day could mean a loss of income, which is something you cannot afford and don’t want to happen.
Electronic Data Has Little Coverage Under Standard Policies
Another reason why cyber-attacks are dangerous?
Electronic data is often excluded under the “covered property” coverage.
Many commercial property policies exclude electronic data as part of a business’ covered property. Even if it is included, the coverage for damage to data is typically small. Some may accept virus or natural calamities as part of the coverage, but extortion and hacking that led to the loss of data are not covered.
You might ask why.
General liability policies require body injury or damage to property – and cyber-attacks lack these components. It would also be hard to assess the damage since the data loss is electronic, which means it would be difficult to make a determination. If you want to be protected, make sure you avail of specific cyber liability insurance to keep you covered.
Losing data is one thing, but losing data that will be used against someone who has no idea that his information was stolen, revealed to the world, and used without his knowledge is something else entirely.
This will be considered as an invasion of privacy and data theft among others, which could lead to network and privacy lawsuit because of your failure to protect his data, which was shared to you in confidence.
When a lawsuit happens, additional expenses will most certainly be incurred because you need a lawyer to defend you. Lawsuits typically don’t magically end overnight, which means cases like this could take a toll, not just in your business, but also in your attitude and mindset as the business owner for months or even years on end.
This leads you to another danger of cyber-attack.
Damage To Reputation
Being sued for invasion of privacy will hurt any business.
A prime example that most of us are familiar with would be Facebook who has been sued for privacy violations repeatedly over the years.
One of the more recent ones was a real doozy;
Law firm Stewarts Law US announced today that it has combined 21 privacy lawsuits against the social network into a single, class-action suit, charging the world’s largest social network with violating user privacy by allegedly tracking their Web usage.
Stewarts Law is asking for $15 billion — a sum it arrived at by calling on the U.S. Wiretap Act, which “provides statutory damages of the greater of $100 per violation per day, up to $10,000, per Facebook user,” the law firm wrote in its suit, according to Bloomberg, which was first to report on the story.
Unfortunately, a lawsuit can be damaging to not just your reputation as a business owner or individual but also to that of your business or service. Previous and potential customers would not want to do business with you out of fear because they see you as someone who cannot protect personal and confidential information.
This is something you don’t want to happen, which is why you should keep yourself and your business protected against cyber-attacks as much as possible.
Here’s the good news: you can prevent cyber-attacks from happening.
Cyber risk management and recovery tools are improving, so take advantage of them. The cost of protection your business and yourself will seem like a drop in the bucket to the alternative of what could happen if you become the victim of a cyber-attack.