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Every year, cyberattacks cost the U.S. economy roughly $100 billion, cutting out a major chunk of money that businesses, healthcare organizations, and local governments would prefer to keep. But while this staggering number gets most of the attention, cybersecurity threats end up costing companies more than just dollars and cents in the long run. There are many ways that a cybercrime, such as ransomware, can affect a company or public organization. From losing trust and future business to having to pay out millions more in fees and legal settlements, the effects of a cyberattack are sprawling and unforgiving.
Here’s a look at some of the unexpected costs that a Cyberattack can have on its victims.
Customers can sue for product commitments not kept, and end users of services can end up bringing legal cases against a company for service outages that caused damage or breach of service. Lawsuits are typically lengthy processes and can be dragged out for years. For companies in the middle of other business dealings, such as merger and acquisition activities, the liability alone can end up cancelling that deal.
Halting production due to a cyberattack means stopping the product or service from generating more revenue. This production timing change also upends any return-on-investment (ROI) calculations and expectations for the product.
Loss of Trust
Not only is the potential for more earnings cut short due to a cyberattack, but the potential for acquiring new customers and retaining current customers is negatively impacted as well. When a company undergoes a cyberattack, consumers will undoubtedly look at that company or public entity in a new way. A company that suffers a cybercrime can be looked at as not doing enough to protect its sensitive information and financial data, not to mention its customers’ information. Once a customer’s trust is tainted, it’s difficult to earn it back.
Disruption of Work
When a company finds itself in the middle of a fallout from a cyberattack, it will need to devote attention and resources towards dealing with the evolving issues at hand. In order to do this, it is always necessary to have some downtime in operations to get to the bottom of an attack. This takes time away from regular tasks and other IT-related duties, which can in turn open a company up to more attacks.
Cyber insurance is one of the most important components of a company’s protective measures. Depending on the technicalities, some insurance policies will not cover costs related to a cybercrime if the attack is considered an act of war. Furthermore, any non-compliant systems may end up disqualifying insurance coverage, especially in cases where no cybersecurity policies are in place.
About Mavon Insurance
At Mavon Insurance, we pride ourselves on our unique approach to insurance. We focus on integrity, communication, professionalism, respect and gratitude to help our clients succeed and place business in specialized markets. For more information about our products, or to become an agent, contact us today at (855) 248-1480.