It’s no secret that having the right technology is critical to being a successful independent agent. But as independent agents embrace technology, they must also be aware of the risks for cyberattacks and know how to protect their business.
Taking the necessary steps to be cybersecure gives agents another clear advantage — they are then better able to educate their small business clients on how to purchase the best cyber insurance while meeting the ever-growing list of compliance regulations and requirements which differ from state-to-state, but are becoming more stringent in all states.
And now agents must be aware of a new emerging risk: the compliance requirements being imposed upon them via their carrier and brokerage contracts due to their status as an affiliate of the carrier or brokerage.
Every Business Is a Target
When it comes to cybersecurity, there’s much for agents to take in. A recent McKinsey article warns: “While awareness is building, so is confusion. Executives are overwhelmed by the challenge [to defend themselves from cyberattacks]. Only 16% say their companies are well prepared to deal with cyber risk.”
The report found that businesses are “at risk of collateral damage from untargeted malware and attacks on widely used software and critical infrastructure. And despite all the new defenses, companies still need about 99 days, on average, to detect a covert attack. Imagine the damage an undetected attacker could do in that time.”
Cyberattacks touch businesses of all sizes and are now prevalent in small and medium sized businesses (SMBs), which often are not as proactive or well protected as larger businesses. Criminals know they are easy targets. According to a Hiscox 2018 Cyber Report, 47% of small businesses suffered at least one cyberattack in the past 12 months, and 44% of those suffered two to four attacks.
Spam, ransomware and phishing are currently the most common forms of cybercrime that small businesses face, and according to Inc. Magazine, “60% of small businesses fold within six months of a cyberattack.”
These statistics not only show that independent agents need to protect their own business, but also that there is a growing market in commercial lines for agents, especially those who are educated on the risks associated with technology and systems, cybersecurity strategies and coverages available.