Cyber Liability Risks Restaurant Owners Face

Over the last few years, franchises have become a favorite target of cyber criminals. Hackers have stolen password credentials, franchise business records and customer credit card data from some of the biggest names in the industry. The consequences of a hack are serious.

Consider these recent statistics: • The average cost of a data breach for small- to mid-sized businesses was $105,00 in 2021, up from $101,000 in 20201 . • Small businesses are three times more likely to be targeted by cybercriminals than larger companies2 . • One in five organizations had at least one account compromised in 20213 .

If you are startled by these statistics, you’re not alone. A recent U.S. Small Business Association survey found that 88% of small-business owners felt their business was vulnerable to a cyber-attack.

Reducing your Restaurants’ Cyber Exposures

The risks of a cyber-attack are something you can’t afford to ignore. Most attacks are the result of a business being unprepared to handle common threats. By taking proper action, you will significantly minimize your risk. Implement these tips:

1. Protect Your Computer Systems

Protecting your computer systems from these threats requires the right combination of tools. A firewall is essential to keep cyber criminals from accessing multiple systems through a single vulnerability. Antivirus software is needed to stop intrusions and sound the alarm if an attack is successful.

2. Practice Good Password Security

Always choose strong passwords, use different passwords for each system and update passwords that are old or compromised. 3. Perform Maintenance and Updates

Plan for software updates as systems age and make sure critical security update patches get installed right away.

4. Schedule Regular System Backups

Perform regular backups for any important data and systems.

5. Hold Cyber Risk Awareness Training

Employees know they should avoid a suspicious email but spotting today’s most common phishing tactics is getting more difficult. Train employees on what to look for and how to stay safe.

6. Create a Cyber Response Plan

Having a plan makes it easier to identify when there’s been a breach and gives you the tools to act quickly to minimize the damage.

7. Add Cyber Liability Insurance Coverage

A cyber security incident can have a far-reaching impact on your business, and the risk is always there, even with all the right protections in place. Cyber liability insurance coverage can help minimize your exposure, cover your costs and allow you to recover more quickly.

Understanding Cyber Liability Coverage

Like you have plans in place for business incidents of all kinds, Cyber Liability has coverage in place for cyber incidents of all kinds. • Your largest fryer goes out and causes your business to close. You call your go-to repairman to replace it. o Cyber Liability comparison: System damage and business interruption. When a computer system disruption prevents you from conducting business and results in the loss of income and extra expenses, Cyber Liability covers the cost.

• A burst pipe leaves an inch of water throughout your building. You call the restoration company to clean the carpets and restore your space. o Cyber Liability comparison: Data restoration expense.

Pays for the expenses associated with restoring data, software or firmware that is corrupted or damaged due to a cyber-attack. • A disgruntled customer rants on social media and the local news outlet picks up the story. You reach out to your lawyer to see how to respond. o Cyber Liability comparison: Incident response. To handle the aftermath of a cyber-attack, specialists are called upon, including defense counsel, crisis management, initial response guidance, IT forensic investigation, notification services, public relations and more. • You ask an employee to place an ad about a job fair. In the ad, they talk badly about a competitor who then sues you for defamation. You contact your lawyer. o Cyber Liability comparison: Multimedia liability.

Covers you for lawsuits stemming from claims of copyright infringement, trademark infringement and defamation arising out of your company’s electronic publishing. • You discover an employee has been stealing food, alcohol and tips. You fire them, following HR guidelines. o Cyber Liability comparison: Cyber Theft and Social

Engineering Loss. Covers your businesses for incidents of social engineering or fraudulent use of your business computer system that result in fraudulent funds transfers from the bank. Cyber Liability Insurance for Your Franchise

Because of your business’s unique vulnerabilities, franchises will likely continue to be a favorite target of cyber criminals. But it’s within your control to make your systems more secure and minimize your own risk.

Contact co-brokers Lockton Affinity and Elevanta to learn more about cyber liability insurance and cyber security resources that can help protect your business. Visit Elevanta.LocktonAffinity.com to learn more. S

1 Kaspersky. “Managing the Trend of Growing IT Complexity.” Kaspersky, 5 Oct. 2021. 2, 3 “Barracuda Networks.” Volume 7 – March 2022 | Barracuda Networks. www.barracuda.com/spearphishing-vol7.

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