Technology consultant firm Cognizant fell victim to cyber-attacks caused by a ransomware attack last April. The hack disrupted thousands of employees from accessing networks from their home during quarantine. Clients also disallowed Cognizant to use their networks in case of further breach, causing major revenue and clientele loss.
Cognizant losses total $50-$70 million in lost sales, higher premiums, and defense/legal costs. Without cyber insurance however, the losses would be catastrophic.
Cognizant had out extensive money into cyber insurance premiums with multiple carriers. Insurance insider reports this investment turned out to be a good decision as they earned $400 million in cash reserves from their carriers, another huge loss for carriers in the cyber market. Carriers have been hard with higher loss ratios and claims frequency in the cyber market recently.
What is the overarching message? Right now, allocating resources towards cyber protection is no longer recommended but required. Cyber insurance of some form is necessary to protect against ransomware attacks and saving your company millions. However, insurance is not the only resource that needs investment. There is no way to fully protect yourself against cyber attacks with just insurance. We recommend proper employee training, duel-factor password authentication, and data encryption software.
Stay ahead of the curve and protect your company’s invaluable data. Invest properly and do not be afraid to spend a little extra for full protection. The premiums upfront may prove cheaper in the long run.
Still have questions? Contact a risk advisor today at 914-357-8444 or visit our website here.
