This week I decided that I will strive to educate my readers about Cyber Liability Insurance. You may have heard about this product, but may not know everything you need to know about it. Hopefully it won’t be boring or confusing, and you feel some kind of clarity after reading the article! Here goes…
What To Know Before You Buy…Cyber Liability Insurance
First of all, this coverage is primarily for business owners. Consequently, most good insurance agents are talking about cyber policies to their business-owner clients. It is fast becoming a huge area of exposure that no other policy adequately covers.
What Is It?
Almost all businesses have some kind of sensitive information. This could be it’s employee files, personal customer info, or health-related information. It doesn’t matter if the information is stored on a computer server, in a filing cabinet or in a capsule floating among the clouds – if someone can somehow access that data you, as the business owner, are potentially exposed to a claim. Cyber Liability insurance comes into play when someone suspects a breach of that sensitive data. Above all, it helps with the costs, procedures and action steps that follow.
What Does It Cover?
In broad terms, a cyber liability policy protects against any claim in which confidential personal information is exposed, or is suspected of being exposed. Costs associated with a data breach are high. For that reason, they can have a devastating effect on a company’s bottom line. Furthermore, in some situations a business is required to notify all of it’s customers – past and present – if a breach is suspected. Therefore, the policy can help with:
- client notification costs
- lost business income
- legal defense services
- investigations and forensics
- audit and consulting services
- identity protection services
- credit monitoring costs
- public relations
Can You Give Me An Example?
A disgruntled employee “leaks” personal customer info. Your top sales guy loses his laptop. Malicious software extracts customer names and credit card numbers from your database. Hackers upload encryption software to freeze your network and demand a ransom before they will unlock the data. The scenarios are endless. Essentially any instance where unauthorized personnel could access protected information is a breach. Furthermore, the business owner is liable in almost every situation.
So How Much Does It Cost?
That depends on several factors: type of industry, security measures in place, also gross annual revenue, and many more. Now consider something. According to the Ponemon Institute in 2010 the average cost of a data security breach in the retail industry was $185 per record. Think about how many records you have in your system and decide whether you can afford to NOT have this coverage.
Finally, as with all of our quotes there is nothing to lose by seeing what a cyber liability policy looks like for your business. I promise that we don’t do that pushy salesperson thing, so give us a call toll-free (855) 678-CEDAR or email [email protected].