An article in our Plugged In tech and life sciences series

By Mitchell Foster II, Chief Underwriting Officer for Technology and Life Sciences

Technology companies are one of the most attractive targets for cyber criminals as they have access to large amounts of data, including personal information, intellectual property and financial records. As the backbone to many other businesses, tech companies face significant risk from cybercrime, making it critical they safeguard their systems and manage their data appropriately. 

As a result, many are shifting their focus from reactive crisis plans to proactive, preventative measures. Fortunately, independent insurance agents can help their tech clients protect their businesses through risk prevention, mitigation and effective insurance programs. 
 

The evolution of cyber threats

Cyberattackers are becoming increasingly sophisticated, often using artificial intelligence to be more efficient. A report from Statista suggests 45-50% of phishing emails sent to businesses could be AI-generated by the end of 2025, potentially increasing victim response rates to 62-65%. 

Beyond the direct operational and financial impact, a cyber incident can damage a company’s reputation. As a result, customers and partners are requiring even more rigorous due diligence from their tech partners, both from a cybersecurity and a business continuity perspective. Customers and partners can quickly lose trust if a brand’s image is damaged, and some tech companies may never fully recover from the reputational fallout, making it even more important plans are in place to help minimize the long-term reputational impact.  

Risk prevention is key

As tech companies look to grow, sound risk management and robust business continuity operations are essential. These companies seek partners that can help expertly manage their systems, protect their data and recognize their tech partners’ cybersecurity is just as important as the technology offerings they provide. 
 

The role of the independent agent

Agents looking to best support their tech clients should consider partnering with carriers that offer the following:

• Risk mitigation services – Programs that offer proactive risk management services, such as cybersecurity reviews, dark web monitoring, phishing attempt tracking and multi-factor authentication support can help protect tech businesses.
• Public relations coverage – PR or crisis firms can provide critical assistance with executing a campaign to help restore brand image.
• Unified tech and cyber offerings – Combined errors and omissions and cyber coverage offerings in one product offer a seamless solution that can help companies avoid potential gaps or delays in responding to attacks.

If a tech business suspects a cyberattack or is experiencing a cyber extortion incident, having direct contact with a claims expert is also imperative in helping to manage the crisis and minimize impact.

The vulnerability of tech companies to cyberattacks underscores the need for comprehensive data management and robust cybersecurity measures. By partnering with independent insurance agents, tech companies can not only help minimize these risks but also ensure they have effective insurance programs in place to protect their businesses. 
 

About the author

Mitch has more than 20 years of experience in the insurance industry, specializing in technology and life sciences over the past decade. He has held various underwriting leadership roles throughout his career. In his current role, Mitch is responsible for The Hanover's national strategy and appetite for technology and life sciences.