Two of the biggest misconceptions about Cyber Liability Insurance is that any policy will do and that you can simply put it in place and never worry about it again. Wrong. This is especially true if you’re a supply chain manager working with subcontractors. There is no blanket policy or solution that will fully protect your business from cyber risks.
In today’s fast-paced business environment, working with subcontractors can be a great way to keep the momentum of your supply chain moving forward. But you need to be fully aware of the potential risks of these business partnerships.
Let’s say a subcontractor’s software is integrated with your network, and as a result provides them with access to private or confidential information. Shouldn’t they tell you this? For all you know, they might be accessing this information and sharing it with or selling it to other parties. Even if a subcontractor isn’t knowingly accessing your private or confidential information, it can still be exposed if their software is breached. Both of these are real risks that supply chain managers need to consider and plan for.
There are two ways you can get ahead of these risks. The first way is by making sure all of your agreements with subcontractors require them to provide you with explicit information regarding how their software works, what information it will grant them access to on your network, and how they will use that information, among other details. You should also require them to provide you with advance notice of software updates, including how these updates will be implemented and how they will alter your existing operations.
The next most important step is making sure an insurance broker with industry experience is a part of the process from beginning to end. Having your broker constantly involved ensures that you’ll receive a policy that best protects your business. Making sure your broker has a seat at the table provides them with the opportunity to bring to light certain risk factors or vulnerabilities you might not have even considered.
Cyber risks are very real, especially when you’re working with subcontractors. As technology continues to evolve and become more integrated, supply chain managers need to know how to protect themselves. Buying a cookie-cutter Cyber Liability Policy isn’t the answer. Rather, you need to work with a knowledgeable insurance broker to identify potential risks, make sure your subcontractor agreements require that they provide you with as much information as possible and build a customized insurance plan best suited for your business.
