The Expert Podcast

So what is your company's risk of a cyberattack? Well, it might be higher than you think. An asset manager conducted an audit of hundreds of companies to assess their risks for cyberattacks. What did they find? After screening more than 500 companies to detect vulnerabilities, they discovered that about 20 percent were running outdated software. To this analyst, that was shocking. Outdated software lacks updated patches, protections, and firewalls that could block a hacking attempt.

These weren’t small companies; these were large-scale investment-type financial companies. If those companies, with very large budgets and cybersecurity teams, have 20 percent of their software out of date, what are the percentages for smaller companies, mid-sized companies, or maybe manufacturing companies? Probably a lot higher. That’s a huge opportunity for hackers.

It’s so concerning that this investment analyst stated he would sell shares of a company if he was left with the impression that management wasn’t doing enough to protect the business from cyber risks. Companies that are slow to adopt proper cybersecurity measures will likely pay for it down the line, either in the form of a large data breach or losing clients because trust is gone. It’s more than just the cost of a breach; it’s the cost of losing customers, employees, and possibly even facing regulatory investigations.

Catching cyber risks should be a strategy adopted by any funds investing in companies. The pandemic served as a catalyst for cybercrime, but now cyber threats are taking on a life of their own. Whatever the size of your company, make sure you have a solid strategy in place for cyber protection.

Many times, this strategy will come from your cyber insurance policy. These policies often require you to implement specific measures to keep the policy active. That’s a good thing. It’s not overbearing or an annoyance; instead, it’s a way to help you avoid a claim. Even if the insurance company pays a claim, you’ll still face significant losses related to trust, client retention, and the ability to market for new business development.

So, however you do it—whether your cyber protection marching orders come from your insurance company or an internal IT person—make sure you run a tight ship. This will help reduce the risk of a catastrophic financial loss to your company.