Cyber Liability is the hero that will save your company
Dan Levenson September 27, 2022
It is a scary world for the business owner, and the risks go far beyond stealthy competitors and the vagaries of the economic cycle. Businesses are increasingly under attack, with data breaches, hacking attempts, and the ever-present threat of ransomware. Given the dangers of the cyber world, it is no surprise that so many businesses are opting for the protection of cyber liability insurance. But what do these policies cover, and why should you get one?
Did you know that ransomware affects nearly 50% of all public and private businesses? Ransomware.org, a cyber-security research firm, released a report revealing that 90% of all worldwide enterprises were victims of dangerous malware and phishing schemes, and 50% of those same firms were victims of ransomware attacks, compromised accounts, or faked credentials. Large organizations are not the only ones who need to be concerned about this danger. Cybercriminals’ methods are always evolving, and no company is immune to cyber security risks, no matter how big or small.
How Cyber Insurance Can Help Protect Your Business
- Businesses can avoid financial ruin in case of a data breach, virus, or other malicious cyber-assault by purchasing cyber liability insurance. It protects against claims made by customers and suppliers who may have been harmed by a breach.
- It’s impossible to avoid the news of cyber crimes. Every news channel has coverage of it. A data breach can compromise your most sensitive personal and financial information, making cyber security a key issue for businesses and individuals alike. These attacks, the sophistication of which is increasing with time, can be launched either by common hackers or by organized groups of hackers operating on a global scale.
- The financial toll on a company’s bottom line from dealing with the aftermath and costs of a cyberattack is significant. Your company’s reputation and bottom line will be safe with cyber liability insurance in place. However, without cyber liability insurance, your company faces the risk of lawsuits and, ultimately, closure.
- Without a cyber-insurance policy to cover a data breach’s legal and financial consequences, it is difficult to recover your losses once you’ve been compromised.
What are the Various Types of Cyber Insurance Coverages?
There are several categories of cyber insurance coverage available. These are separated into either first-party or third-party coverage as follows:
First-party damages include those incurred directly by the company for the loss of property and income from the cybercrime.
Fraud and theft
Costs incurred from data loss as a result of theft and fraud. This policy also covers funds transfer and other associated risks.
Investigation of a breach can be an expensive but necessary task. Fortunately, this policy will cover the technical and legal services that are a part of a forensics investigation.
Business interruption expenses such as loss of income.
Extortion and blackmail
Also known as ransomware, this policy covers the cost of paying the ransom, which can assist in evidence collection against the hacker.
Data loss and restoration
Restoration or replacement of damaged computers or software incurred from the data intrusion.
Third-party coverage policies cover the company’s legal obligations as well as compensation to clients.
The cost of court judgments, lawsuits, and penalties arising from cybercrime.
This policy covers any mandatory requests by the local and federal governments related to the data breach, including any fines incurred.
Communication to stakeholders
Costs incurred for notification of clients, employees, and the community about the intrusion.
Credit monitoring costs
Following a data breach, companies provide clients with credit monitoring services to ensure their information is not used by unauthorized parties.
Breach of privacy liabilities
Costs for customer confidentiality breaches, such as private bank account information published online, are covered in this policy.
Cyber liability insurance is an important part of running a business. It can help you recover from the cost of malicious attacks, data breaches, and other tech-related problems. By purchasing cyber liability insurance, you are protecting yourself and your company from financial loss due to these issues. Contact us for more information.
This article is for general information purposes only. It is not insurance, tax, legal, business, or other advice. For specific insurance questions related to you or your business, please contact our office.