Insurance broker Beecher Carlson has launched a cloud-based application service called CyberSelect BI Vision to help educate policyholders on their exposure to business interruption losses from cyber risk.
The app is a cyber business interruption calculator that companies can use to analyze and calculate the possible business interruption costs they would face if a cyber event took out their network or multiple networks.
According to Christopher Keegan, national Cyber practice leader at Beecher Carlson, the idea behind the service is to give companies a mechanism to dig deeper into their cyber business interruption exposure without having to commit to an expensive or invasive method of doing so.
The risk valuation tool allows companies to project maximum foreseeable loss to business income at one or more key locations, by network or division, in the event of a cyber-disaster. The proprietary calculator collects certain financial information and creates an estimated business income exposure specific to an organization’s locations and applications.
CyberSelect BI Vision can also capture expenses faced by companies when they are the target of a cyber-attack. These expenses include replacing hardware and software as a result of damage from wiper viruses such as Shamoon, which destroyed more than 30,000 servers.
The process focuses on the revenue flows and costs at each particular entity, allowing companies to look at the impact on individual networks, technology applications and company divisions. The calculator combines those numbers to estimate an overall company impact. Additionally, companies can adjust estimates based upon levels of reliance on technology and work-arounds that may exist to reduce the impact of a cyber-loss.
Keegan says companies can use it to work through what their exposures are and determine the risk management procedures they should take and what coverages they should buy.
“One of the problems we have had over the years in advising companies on cyber coverage, especially manufacturing companies, is on what limits to buy. It is hard to determine what that number should be and estimate the business interruption loss you would have if a cyber attack happens,” he said.
The cloud-based tool can be used for companies with simple, centralized networks or complex networks situated across multiple divisions and geographies. The cost of the service is less than $400 for the software and once purchased the company can go back and use the program year over year. The data is also not shared with Beecher Carlson or any other third parties unless the company chooses to do so.
Keegan says his agency hopes that companies, particularly those in the energy, manufacturing and retail industries, will see what their cyber business interruption risk is and be motivated to address those exposures.
“What we are trying to do is have companies understand what their exposure is and to spend money on risk management to restrict their exposure. Or they may also find out their exposure isn’t as big as they thought it would be,” he said.
Keegan added agents and brokers should use the calculator as at tool when working with their clients to evaluate their cyber risk.
“This calculator can be used as an educational tool. Agents can walk clients through the steps and help them understand why this risk is different than a traditional business interruption risk,” he says.
CyberSelect BI Vision was created in partnership with Procor Solutions +Consulting, a disaster planning, business interruption and claim preparation firm.
“While traditional business interruption valuation methods can be utilized to create a maximum, foreseeable loss for a cyber-attack, the time frames for spending, rebuilding affected systems and reacting to such events are much more immediate for most cyber incidents and need to be carefully considered,” said Frank Russo, executive vice president at Procor. “CyberSelect BI Vision’s functionality allows those who are most familiar with the cyber threats facing an organization to be involved in the business interruption valuation process.”
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