Cyber-Threat-BlueStone Advisors Commercial Residential Insurance Lombard

The Cyber Threat is Real: What Should You Be Doing?

Everywhere you turn these days, there are references to cyber security and reports of cyber-crime. The pandemic certainly required all businesses – large, medium, and small – to solve the remote work requirement very quickly, and all at once. Today, more people are working from home over unsecure networks than perhaps ever in history and this opens up all businesses to various cyber-crimes. Large companies have tighter networks and more sophisticated security, yet they continue to be hacked left and right. And while the large companies may have deeper pockets in the eyes of cyber criminals, it is the small and medium sized companies that fall as easier prey. So, what can small and medium sized businesses (SMBs) do to protect themselves?

First and most important is to secure a cyber insurance policy that is separate from your company’s General Liability policy. Most GL policies only cover cyber partially, and given the statistics below, getting hacked can mean the difference between staying in business and closing your doors:

  • Global ransomware attacks rose by 40% in the first three quarters of 2020 compared with the same period in 2019, and payments have more than doubled since the start of 2020.
  • Businesses ranked “cyber incidents” as the 15th most significant threat seven years ago; in 2020, it took the top slot, with 39% of companies considering cyber incidents as the most important risk.
  • Three years ago, cyber loss ratios were as low as 10%-15%. Rising claims pushed this figure up to nearly 50% in 2019, and anecdotal evidence suggests cyber loss ratios today hover well above 50%.
  • The average cost of a breach is almost $4M, so having coverage can mean the difference between remaining in business and closing your doors.

Commercial cyber insurance covers a variety of first-party and third-party costs.

First party costs include:

  • IT Forensic Costs
  • Crisis Management Costs
  • Notification Costs
  • Credit Protection Costs
  • Crime and Social
  • Engineering Costs

Third party costs include:

  • Breach of Contract
  • Negligent Protection of Data
  • Network Security Breaches
  • Transmission of Software Viruses
  • Denial of Service Attacks
  • Defense of regulatory actions related to a breach
  • Fines, Penalties, and Assessments

If you would like to obtain coverage, or have an independent review of your current cyber coverage, please reach out to us – we are here to help! You can call 630-504-6400 and ask for Andy, or email

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