There's no avoiding technology in today's world, and that's usually a good thing. But it also puts your business at a higher risk of falling victim to cybercrimes. Even a mediocre hacker can typically gain access to all of your clients' and your information, and quickly put you out of business.
There are a lot of ways a data breach can happen. If it does (and we hope it doesn’t), it’s a wise decision to have a solid game plan and a cyber liability insurance policy to help your company handle any legal battles and keep your business dreams alive. But where do you find the best cyber liability insurance? How much do you need? What type of coverage is available? For answers to all your questions, an independent Insurance agent is a vital part of your insurance search.
What Is Cyber Liability Insurance?
Basically, it’s a contract between a business and an insurance company where the insurer agrees to pay for expenses like fees, fines, lost income, and public relations (depending on coverage) to help the company recover from a number of threats and incidents.
Is Cyber Liability Covered by Business Insurance Plans?
The short answer is "no" or “kind of” at best. Traditional policies, like professional and general liability, have some pretty significant gaps in coverage for digital exposures and are usually issued with broad exclusions and a number of loopholes.
Why Do I Need Cyber Liability Insurance?
If your company gets hacked, cyber liability insurance can help save you from a door-closing disaster in a number of ways which means it's pretty important coverage to have. The only time we'd agree you don't need cyber liability insurance is if you don't keep any of your company or client's information accessible via technology.
Some bad things that could happen:
- Deletion/alteration of data, transmission of malicious code, denial of service
- Loss of private data and/or communications in paper and digital formats
- Invasion of privacy and/or copyright/trademark violations
Average Cost of Top Five Cyber Insurance Claims by Cause of Loss (From 2014-2017)
In the event of a breach, one of the biggest things you can lose is your customers. It should be no surprise that they’re the reason you’re in business.
Percentage of Customers Lost by Companies Due to Attacks
Cyber Liability Insurance for Small Businesses
Large companies are not the only targets. And honestly, smaller shops can sometimes be a much more attractive option since most don’t have the kind of funds they need to keep their records properly protected. Those who don’t take action to up their security could find themselves out of business after a data breach. Here’s an example of why:
Bad thing that happened: 2,000 client credit card records were exposed
Using the previous studies, this will cost:
- Investigative costs: $30,600
- Managing the crisis and reaching out to your customers and the public: $23,850
- Payment Card Industry-Data Security Standard (PCI-DSS): $29,000
- State and federal authorities: $2,660
Total cost: $194,390 | Total cost per record: $97
- Let’s add in the inevitable, “the attorneys are coming with a class action lawsuit”
Lawsuit cost: $582,160 | Total cost: $784,950 | Total cost per record now: $392
Guess what that equals? CLOSED DOORS
What Does Cyber Liability Insurance Cover?
Though hackers remain the number one cause for cyber insurance claims, there are a number of big threats out there that can happen at any time.
Top Five Cyber Insurance Claims by Cause of Loss (From 2014-2017)
Fortunately, a cyber liability insurance policy can help protect your company against a big number of breach events.
Cyber liability insurance provides coverage for:
- Privacy liability: Fills the gaps between state- and federal-specific definitions after a data breach
- Privacy regulatory claims: Legal defense expenses, fines and penalties assessed by federal, state, and local authorities
- Security breach response: IT forensics, customer notifications, PR, and credit monitoring services
- Security liability: Addresses the human element and allegations of a “Security Wrongful Act”
- Multimedia liability: Defamation, libel, slander, copyright, and more
- Cyber extortion: Expenses and payments (within limits) to a harmful third party to avert potential damage
- PCI-DSS assessment: Compliance assessments and expenses involving cardholder information
- Cyber deception extension: Extensions respond to an intentional or misleading material facts contained or conveyed within an electronic or telephonic communication(s) that are believed to be genuine
- Business income and digital asset restoration: Provides for lost business and earnings, expenses, and digital-asset restoration costs
How Do I Find Cyber Liability Insurance Quotes?
We have partnered with Risk Placement Services (RPS) to bring you an easier way to get accurate cyber liability insurance quotes in minutes. With this process, you’re now only four simple questions away from binding coverage up to $100 million in revenue. Get coverage now.
Benefits of an Independent Insurance Agent
Insurance policies can be complex, and searching through company after company can be extremely time-consuming and overly frustrating. An independent agent's role is to simplify the process. They work with multiple insurance companies on a daily basis so they know all the pros and cons to each and can help you navigate the playing field.
Plus, they'll break down all the fancy insurance jargon and fine print to make sure you're confident you got the right cyber liability coverage for your business' own unique needs. Find an independent insurance agent in your community today.
TrustedChoice.com Article | Reviewed by Paul Martin
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Reference: from our friends at NetDiligence (2017)
Reference: from our friends at Cisco (2017)
Reference: from our friends at NetDiligence (2017)