Companies increasingly investing in cyber insurance

Aug 15th, 2013 / Category: Managed File Transfer

Without a doubt, the move toward more data-driven cultures among businesses in every industry has yielded impressive results. Firms have become more efficient, productive and flexible by embracing a wide-range of information-based IT services and operations. With the insight gleaned from these resources, companies have been able to end ineffectual practices and improve their offerings and competitive advantages.

That being said, there are also a number of downsides to this trend. Most notably, the ever-expanding amount of data held by numerous employees within companies has increased the likelihood that a data breach will occur. To take advantage of these digital resources, workers must be able to access and share an immense amount of varied data, and many firms are simply not prepared to effectively protect these environments.

The most important step for any given firm facing this predicament is to invest in high quality secure file sharing solutions. These tools are essential for protecting a company's information while it is being sent between authorized personnel within the organization. Data in motion is often more vulnerable than stored information, and firms, understanding these risks, are investing more frequently in these types of data protection solutions.

Yet this is not the only step that businesses are taking. As a recent report from Experian and the Ponemon Institute highlighted, businesses are increasingly investing in cyber-risk insurance.

Data breach backup plans
The survey found that among participating businesses, nearly one-third have invested in cyber insurance policies. Among those that have not invested in such policies, 57 percent indicated that they plan to buy one in the near future.

More than three-fourths of surveyed businesses indicated that cybersecurity-related risks are more severe than natural disasters, fires, business interruptions and other insurable dangers.

"It's an issue that's much more front and center with senior executives in companies now," said Larry Ponemon, founder and chairman of the Ponemon Institute, in an interview with CSO.

Ponemon added that data security is now a top 10 issue with most companies.

Such concern is understandable. Virtually every day brings news of another company that has experienced a data breach, and the consequences brought about by this exposure or loss. Firms have lost clients, been fined and seen their reputations tarnished following such incidents. Cybersecurity insurance's growing popularity is a reflection of the increasing awareness of these issues, and firms' dedicated efforts to mitigate data security risks.

Prevention is best
While investing in cybersecurity insurance may be a wise course of action as a means of mitigating the damage of future data breaches, the fact remains that the best way to minimize these risks is to implement secure practices. Contrary to the fears many company decision-makers are now experiencing, data breaches are not inevitable. Many businesses have been able to avoid these incidents while continuing to gain maximum value from their varied data sources. But this level of success can only be achieved if dependable tools are deployed.

Secure file sharing solutions are among the most critical solutions in this regard. A secure file sharing solution can ensure that employees are free to send and receive information without worrying that this data will become vulnerable while in transit. Crucially, these solutions must be easy to use. If they are not, employees will likely turn to more convenient but less secure options, such as consumer-grade box file sharing offerings. Such practices can greatly increase the risk of data breach for a company.

Additionally, company leaders must emphasize the importance of secure solutions to employees. Only strong leadership in this area can truly convince workers to avoid risky options and instead use only secure tools.