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Why Cyber Risk Assessments are So Important (and What to Do With the Results)

7 minute read

If your business is connected to the internet or operates via IT infrastructure, you probably have some level of cyber security risk. Yes, that means practically everyone has some vulnerabilities, whether you run a large corporation or operate a small business.

Knowing exactly what your cyber risk looks like allows you to address vulnerabilities, and addressing those vulnerabilities will help you get a better cyber insurance quote.

So if you’re looking for an efficient way to assess and manage your cyber risk before you apply for cyber insurance, a cyber risk assessment is the perfect solution. This report will provide you with a comprehensive understanding of your unique vulnerabilities and allow you to take proactive steps to protect yourself from potential cyber threats.

Through our cyber risk assessment, you’ll receive a detailed report outlining the areas of your cyber risk that need improvement. The report will also show what steps you need to take to mitigate any risks.

So, what does a cybersecurity risk assessment show? And how can it help you get ahead of the game when it comes to your own cyber security posture?

Let’s review…

What Does a Good Cyber Security Posture Look Like?

Before we discuss what our cyber risk assessment looks like, let’s see what it looks like to have good cyber security posture, and how we evaluate that at DataStream Insurance.

Everyone has unique security vulnerabilities: companies work in different verticals and with unique clients, and not everyone uses the same IT infrastructure, software, and tools. Knowing this, we take a “3-legged stool approach” to cyber risk, where a truly secure cyber security posture depends on three essential supports:

  • Tools and technology: a combination of hardware, software, and processes that form the first line of defense in securing your business.
  • Compliance: data regulations that may need to be followed such as GDPR, HIPAA, CCPA, etc.
  • Cyber Insurance: whether you have cyber insurance is the key to protecting your business after a breach

Your cyber security posture will take into account these key factors along with the unique needs of your business and industry. Within these factors, we’ll also understand the degree of third-party risk you face when it comes to your vendor networks, and how sensitive your data is based on your industry.

So, rather than look at one or two factors like whether you are in a high-risk industry or what IT security you already have in place, we take a holistic overview of many factors that affect how vulnerable you are to a breach.

What is a Cyber Risk Assessment?

Cyber risk assessments are used routinely to identify and evaluate risk to a business or organization. These reports help to ensure that the cyber security controls you choose are appropriate to the risks your business faces. By knowing your risk, you’ll save time, resources, and even cut down on premiums before you apply for cyber insurance.

Our cyber risk assessment uses data to evaluate threats and vulnerabilities, and summarizes your risk for a cyber attack. We use our industry knowledge to do a vulnerability analysis of your network, estimating the likelihood of an attack and its cost to you. We also estimate how the risk level of your business compares to others in your industry and we also recommend ways to reduce your risk.

How Does My Industry Affect My Cyber Risk?

According to an FBI report, there has been a 300% increase in cyber attacks in the last couple years. These attacks affect all kinds of businesses differently, but we’ll review just a few of the biggest targets aside from large corporations to give you an idea of the different kinds of risk businesses might face.

Small businesses are frequent targets of phishing attacks and malware. Many small business owners often think they’re “too small” to be a target, so they don’t implement strict enough security measures when it comes to their IT infrastructure. This leaves them vulnerable to attack in ways that are really preventable with a few different security measures including cyber insurance.

Nonprofits and NGOs can be targets because similar to small businesses, they see themselves as small fish. But these organizations often process sensitive information regularly, especially as they receive donations–in fact, this amounts to about $30 billion annually. Processing regular payments like this makes them a target similar to financial institutions.

Financial institutions are probably the first thing that comes to mind when it comes to cyber attacks, and they are affected globally. A report from the IMF explained that the pandemic heightened demand for digital financial systems, and that trend continues. Financial institutions are frequently targeted with phishing, malware, and devastating DDoS attacks.

Businesses in the healthcare industry deal with ultra sensitive user data. During a cyber attack, a healthcare facility may be unable to provide patient care, making it all the more urgent that these organizations have the proper precautions in place.

Your industry is just one of the factors that’s included in a cyber risk assessment, but it’s not the only one.

What Does a Cyber Risk Assessment Include?

There is lots of valuable information a cyber risk includes that will allow you to see your vulnerabilities more clearly. While every company has some level of risk, in general, risk changes with company size and is unique to what industry you serve and what your networks look like.

Datastream’s cyber risk assessment uses machine learning models that provide more accurate insight than models built using industry and size alone. The risk assessment we provide will put together a report of just how risky your business is, the likelihood that it will be hit by a cyber attack, and the average economic loss to your business. You’ll also learn how your cyber risk compares to businesses like yours.

We also include a graph that shows what any reasonably competent attacker can see of your network. We call this your External Cyber Posture, and it shows you how your main domain is connected to subdomains and devices that may be connected to vulnerabilities or risky open ports.

In short, our cyber risk assessment shows you where your company is most vulnerable, so you can decide your best course of action.

What are the Benefits of a Cyber Risk Assessment?

Security breaches are expensive for businesses of all sizes. Attacks are getting more sophisticated and require better tools to address and monitor risk. In 2022 alone, there have been large data breaches and attacks on Microsoft, the Red Cross, Cash App, countless instances of crypto currency theft, and many smaller businesses that didn’t make the news.

A cyber risk assessment will provide you with increased awareness of what threats your business might be facing, and how those threats can impact your business and employees. It will also help you tackle and mitigate future risk by preparing your company for the worst. You may also find ways to improve communication or tools that you’re using at work.

One of the other major benefits that can come from knowing your cyber risk, is that you can save big on cyber security insurance premiums. Doing the assessment before you apply for insurance will allow you to address issues that can make your cyber insurance premiums costly.

How Can I Improve My Cyber Risk Score?

After you take our cyber risk assessment, experts at DataStream can review your report and outline the things you need to do to improve your cyber risk before you move on to get a quote for cyber insurance.

This could be tackling things like security infrastructure, vendor compliance, cleaning up unnecessary data, making sure you have information backed up, and anything else that comes out of the report that is unique to your business.

But before you can improve your score you need to know what it is.

A cyber risk assessment is an invaluable document to any business that will help you get ahead of the game. By getting started with your free cyber risk assessment, you can improve your score and set your business up for success.

SMBs

Small-to-medium businesses that do not offer IT consulting services to assist in managing the technology and security of other businesses.

MSPs

IT Consultant businesses (MSP, MSSP, etc.) that manage the technology and security of other businesses.