Earlier this month Anthem reported it was the victim of a cyber attack that exposed the personal information of almost 80 million clients ( you and me). According the the February 21, 2015 issue of National Law Review, class action suits have already been filed “claiming that lax Anthem security measures contributed to this incident”.
While Anthem has the capital and resources to survive a cyber attack, most small business owners do not. Recent Symantec research indicated that 60% of the small businesses they studied that were affected by a breach was out of business within 6 months of a cyber attack because the breach expenses and damage to their reputation was too great to overcome. A 2014 NetDilligence report of 111 actual cyber crime liability claims noted the average payout was $733,109, covering forensic analysis and containment of the breach, notification requirements, legal guidance, public relations, legal defense, legal settlement, regulatory defense, and regulatory fines.
McAfee’s June 2014 “Economic Impact of Cybercrime” report stressed that cybercrime is a growth industry because of great returns and low risks for the criminals. My opinion as a business advisor is that your business will likely be directly or indirectly affected by a breach. Do you and your business have a plan to respond to a cyber data breach? Does the plan address the initial forensics costs related to identifying and containing the breach? Does it work through the maze of federal and state notification laws to avoid civil penalties? Assuming you identify and contain the breach and complete all of the notifications, are you ready to handle the harm to the goodwill value of your business that is based on trust and reputation?
Our business owner clients have proactive and comprehensive wealth management plans to grow their business and personal wealth but these plans can be ruined if one criminal sees a weakness in your defenses and decides to attack. Your comprehensive wealth management plan must include a cyber risk plan and analyze the cost and benefits of insuring all or parts of that risk.
We’ve worked with business owners who take all the proper security steps for their office network and create a proper plan but then fail to secure the many cell phones their employees and family use that contain confidential business data. An Infosec 2013 report found that only 26% of mobile users have security software installed while 49% use their personal mobile devices for work. Many protect their computers but not their phones and the business data on them.
Create a cyber risk plan for your business and personal wealth and discuss the plan with your family and team of advisors. Doing so will protect the wealth you are working so hard to grow for your family and future generations. Contact us for tools and resources you can use to create your plan.
Tim Scannell, CPA, CFP TM provides Personal and Business Tax Planning, Estate Planning, Investment Management, and Generational Wealth management to his clients. “Clients work with us because we don’t sell products – we create customized plans based on each client’s unique goals, and we continuously reevaluate client plans to ensure they are aligned with changing needs. Our clients rely on us to protect their futures, and we take their trust to heart”.
David Karp, Anderson Insurance, since 1939, the foundation of our agency has been to provide quality service and products to our personal and commercial clients. Our firm conviction is that our client’s best interest is our primary responsibility. It is important to us today as it was in 1939..