Managing risks is a critical component of your business' cyber security. If your systems, networks and devices are vulnerable, the services and operations of your business, and even your customers, may be at risk.
What is cyber risk?
Cyber risk is a business-wide issue, not merely a concern of the IT professional. It comprises any risk of financial loss, disruption or damage to your business potentially arising from:
- your online activity
- online trading
- failure of your IT systems and networks (regardless of the cause)
- storage of personal data on IT systems and networks
Cyber risk affects all types and sizes of businesses and organisations that rely on the digital networks, technology or information. When assessing the risks your business may face, make sure that you consider all the different types of cyber security attacks.
Cyber risk management
You can manage cyber security risks in the same way you would protect any other aspect of your business. One-off technical solutions are unlikely to provide sufficient protection. You should make cyber risk management a part of your business' day-to-day operations.
Steps involved in cyber security risk management are:
- risk analysis - understand the specific threats to your business
- risk strategy - determine the processes and controls your business needs
- implementation of risk solutions - deploy the necessary cyber security measures
- risk training - educate staff about their role in managing cyber risks
- monitoring - review and test effectiveness of your security measures
- risk transfer - consider insuring against cyber risks and plan for contingency
See more on IT risk management.
Security breaches can result in significant costs and damages to your business, so properly managing the risks is extremely important. You may be able to prevent or detect most attacks with basic cyber security measures for your staff, processes and IT systems. If you're not sure what to do, a good place to start is the government's Cyber Essentials scheme.
What is cyber risk insurance?
A cyber security insurance (and cyber liability insurance) can help your business mitigate risk exposure by offsetting some of the costs involved in cyber incident recovery. These may be expenses related to:
- the management of an cyber incident
- the investigation of a breach
- data subject notification and remediation
- liability, eg for breach of privacy or unintentional distribution of confidential data
- professional fees related to recovery actions
- business interruptions, eg from network downtime
Cyber risks typically fall into 'first party' risks and 'third party' risks. Some policies cover either or both of these categories.
Many cyber insurance policies may also cover you against things like extortion, electronic theft or intellectual property infringement. Most insurance products will have certain exclusions, so if you’re looking to buy cyber insurance make sure that you read the fine print carefully. Find out more about cyber insurance.