4 Cyber Insurance Myths Debunked

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It’s an innocent mistake. Someone in your company clicks on a phishing link and suddenly customer data and private company information are at risk. It’s a terrifying thought. Outside of enterprise companies, most companies don’t have the internal know-how to mitigate the risks. That’s exactly why cyber insurance is the hottest new protection for everyone from emerging industries and ambitious consumer brands to tech startups. Cyber insurance is one way to help your business recover following a cyberattack. It covers financial losses caused by events such as data breaches, cyber theft, ransomware, and more. But few people understand these new policies. Because of the complicated nature of cyber insurance, there are a lot of myths out there that can be harmful to your business if you fall for them. Plus, as we always say, the best time to manage a crisis is before the crisis. Let’s debunk these 4 cyber insurance myths together. 

First, cyber insurance typically covers the cost of:

  • Recovering data
  • Legal proceedings
  • PR crisis management: notifying stakeholders such as customers and or investors about the incident
  • Restoring the personal identities of those affected
  • Extortion fees

You can see why cyber insurance policies are in high demand. They cover all the bases of your worst nightmare. And yet, there is a lot of fine print in most policies, so it’s important to ask questions and know what isn’t included in your cyber insurance premiums.

Myth #1: All I need to protect my business from cyber threats is a cyber insurance plan

This could not be further from the truth. Your insurance provider will only cover your business if you meet the requirements outlined in your contract. Most reputable insurers will require proof that you have followed the proactive cyber measures outlined in your policy. If you can’t prove your compliance, your claims are unlikely to be paid.

One of the most common insurance requirements is that you have top-tier cybersecurity protection. Another common requirement is evidence of a solid plan in place should you have an incident. You often see these plans referred to as table-top exercises, and they are typically done from a purely technical basis, so Avaans Media has teamed up with Ignite Solutions to cover your technical and brand bases should you experience a cyber incident. A plan like that could help you get cyber insurance, lower your rates, and provide a template for the recovery of both data and brand. Plus, if you ever are breached, you’ll have a team of experts who already know you and your company.

Myth #2: I don’t need insurance since I have cybersecurity solutions

Even though cybersecurity solutions can bolster your defenses, they don’t make you immune to cyber incidents. Yes, cybersecurity solutions reduce the risk of a cyberattack by identifying and protecting vulnerable points in your system. However, no solution can completely protect against all threats because staying on top of emerging risks is challenging. Yes, we absolutely recommend ongoing monitoring, but remember, it only take a second, and human error always results in vulnerabilities in a system, regardless of how secure it is. That’s why it’s a good idea to have a cyber insurance policy in place to fall back on in case of an incident.

Myth #3: Cyber insurance is easy to get

As technology advances, so do the occurrences of cyber incidents. With small and medium-sized businesses being the most susceptible targets of cybercriminals because of a lack of enterprise-level protection, the likelihood of an attack is high. Cyber incidents are so frequent and costly, that insurers have been losing money with their policies. As you can imagine, that’s not sustainable for anyone. Insurers are reluctant to provide coverage since the risks are significant. While policies are still available, they are becoming more expensive and difficult to obtain. This is why proactive steps will help you secure a quality insurance policy. Know what you will do and who will do it. This kind of planning could save you millions of dollars in lost revenue, not to mention brand damage. For example, should you turn off your computers if you’re breached? Who pauses all social media and outgoing emails to clients while the breach is active? Who will talk to the press?

Myth #4: My policy will handle my claims in case there’s an incident

If you can’t prove that you’ve complied with your cyber insurance policy’s prerequisites, your claim will probably be rejected. More and more, insurers are requiring you to complete a series of steps to reinforce your policy. Some of these steps are technical, and some are operational. Covering your bases with an IT service provider and your PR team to develop a plan increases the likelihood of claim approval. An expert PR and IT service provider can help you remain compliant with your cyber insurance policy and provide evidence of such compliance. The best time to handle a crisis is before it happens and never is this more true than with cyber incident planning. Plus, knowing that you know what to do and how to do it will give you peace of mind whenever you see another security breach headline.

Partner for success

It’s crucial not to fall for the above myths about cyber insurance so that your business qualifies for a policy and receives the coverage you pay for. However, it’s also important to remember that cyber insurance is something that demands a lot more time and effort than you might have.

For more information on protecting your data and your brand, contact us. 

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How Much Does a PR Agency Cost?

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Maybe you’ve never hired a PR firm before, or maybe it’s been a while and you’re just unsure of what a PR agency costs. Either way, you’re asking yourself, “how much will a PR firm cost me?” Since PR usually falls within the marketing budget, let’s start there.

To grow your position in the marketplace, a good marketing allocation is about 15% of revenue. In 2022, the average marketing budget for B2C brands was 13.7% of revenue, and for B2B brands, it was about 10% of revenue.

So if you’re an average company, and you’re looking to maintain your position, you’re probably spending in the range of 10% of revenue. If you’re looking to dominate, your budget should be higher. Ambitious startups typically allocate between 12-17%. A typical breakdown might be that 1/3 of the budget is advertising, 1/3 of the budget is content, and 1/3 of the budget is PR. Large international agency budgets can be $380,000 or more annually, while a mid-range agency budget typically clocks in at $156,000-$180,000 annually and a smaller agency budget would be $120,000 per year, a mid-range freelancer could be anywhere from $36,000-$100,000 a year. If you’re a CPG or DTC brand with a marketing spend of under $100,000, then you might consider consumer product PR sprints, which feature micro contracts that align with key buying seasons. Hiring a PR agency is an investment, but considering PR converts ten to 50% better than advertising, PR is indeed a place where the ROI pays off.

 

So what goes into a PR agency’s fees?

 

According to Muck Rack’s 2021 State of PR report, the number one cost to a company to PR is the agency, which makes sense because unlike programmatic ad spending (a typical minimum is programmatic spend is $25,000/month), PR agencies rarely have a minimum spend or activation fee requirements outside their retainers.

PR agency rates increased, and in 2020, the average PR agency CEO billed $417 per hour, while VPs clocked in at $319 per hour and Account Managers billed $256 per hour. The average blended rate was $240 per hour. It’s safe to say that if your PR team has executive PR experience, and your agency spends an average of 10 person-hours per week on your account, your monthly retainer will be around $13,226 per month.

If you require more executive hours, your fees could go up. If you work mostly with a junior team, your rates could go down. Oftentimes, fees are different depending on your strategic objectives. For example, if you want to keep a firm on retainer for a few calls a month, and no proactive media outreach, your annual fees may be considerably less. If you are trying to secure investment or you’re pre IPO, you may find your fees are on the higher end of an agency’s fee structure.

It’s a balance to strike your budget with your goals, but when asked, I always give the same advice to CMO’s and startup founders. In 2020, 45% of companies increased their PR budget. If your budget is $400,000 or more per year, hire an agency that does $20 million+ in revenue. If your budget is $180,000 per year, hire a boutique PR firm, with less than $10 million in revenue. If your budget is $60,000 per year, don’t hire an agency, hire a freelancer.

Odwyer PR’s annual report shows rates increased considerably between 2019 and 2020, so if your agency didn’t raise its rates, you’re fortunate.

Agencies are notoriously reluctant to share minimum retainers, but in 2013, several agency executives did just that with PR Observer, an industry publication.

“To properly scope a client program and assign the proper team support, we feel $15,000 – $17,500 per month is a reasonable starting point.”—Anne Green, President & CEO, CooperKatz & Company, Inc.

“Our retainers range from $7,500 – $50,000 or so. Crisis costs are different and generally charged by the hour with a $20,000 minimum.”—Ronn Torossian, Founder & President, 5WPR

“We have some clients that pay us $100,000 or so per year, some clients that pay us more than $100,000 per week, and many clients that pay us $100,000 or so per month.”— Mark Hass, President & CEO, Edelman United States

“Our clients generally pay between $15,000-$30,000 a month depending on the workload.”—Stu Loeser, Founder & President, Stu Loeser & Co.
So what’s typically included in a bespoke retainer rate? Well, again, that may depend on each agency’s specialty. For example, if your agency specialized in digital communications, you may find that social media content creation is included, but media relations are not. But the following services are a good rule of thumb to expect within our typical PR agency retainer:
  • Strategies about how to stand out from your competitors using PR
  • Internal and external communication strategies that match your growth goals.
  • Campaign development and creative activations for marketing opportunities.
  • Media relations, and securing regular media coverage, speaking engagements.
  • KPI and business impact reporting.
  • Copywriting such as press releases, speeches, white papers, and branded journalism.
  • PR crisis planning – but not necessarily crisis management.
  • Partnership strategy and potentially management such as cause, social impact, or purpose-driven PR initiatives.
  • Executive training, including media training, interview prep, and research or executive ghostwriting.
  • Content strategy for video, social media, and inbound leads.
  • Content creation oversight, including social media, photography sessions, and video development.
  • Poll or research development, implementing the poll may or may not be within the agency’s retainer.
  • Peer agency coordination, such as with branding or advertising agencies.
  • PR campaigns that “make the news,” are designed to create word-of-mouth or media opportunities.

For a complete list of what we would include in your PR retainer, reach out to us and tell us more about your business and your goals.

Hiring a PR agency is an investment, but considering PR converts ten to 50% better than advertising, PR is indeed a place where the ROI pays off.

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