In the event of an attack, are you covered under your standard business liability insurance policy?
In most cases, the answer is no.
What Is Cyber Liability Coverage?
Cyber liability coverage is insurance for liabilities that come from unauthorized use or access to electronic files or software within your business. Cyber liability coverage also provides insurance for claims of spreading a virus or malicious code, computer theft and extortion.
Liability for loss of employee or client data is typically not covered under the normal corporate insurance company policy. Some business insurance policies that offer general liability as well as directors’ and officers’ liability may provide some coverage for those areas. Most people discover large gaps in their coverage after it is already too late.
Who’s at Risk?
Most people assume high profile companies are at a higher risk for a data breach but small/medium sized businesses should not assume they are immune to cyber terrorism. Virtually all businesses online are targets of cyber crime. Money attracts criminals, so financial industries suffer the most when it comes to online cyber-attacks. Years ago, there was just one lone cyber hacker; today there are criminal enterprises that are looking to make cyber-attacks part of a new business model.
Money remains the biggest target for cyber crimes, putting financial institutions that move money in the cyber war zone, but money isn’t the only target. Defense and government industries and are also being targeted by cyber terrorists looking to gain information.
The amount of money that is spent to recover from a cyber crime can sometimes cost more than the amount that was initially stolen.
So Why Doesn’t Every Business Invest in Cyber Liability Insurance?
Cyber liability insurance has been on the market for over 10 years but most people don’t even know it exists. If they do, most professionals think that their company will never experience a data breach and do not consider the outcome if their company was to experience a breach. The others that do know about cyber liability would rather spend their money elsewhere. If your company does get hacked and you lose data, you’ll likely spend more money on legal fees than you would have spent on security in the first place.
What Does Cyber Liability Cover?
- • Data breach and privacy crisis management
- • The expenses related to the data breach investigation as well as court costs and fines.
- • Multimedia and media liability
- • Damages to specific defacement of a website and/or intellectual property rights infringement.
- • Extortion liability
- • Losses due to a threat of extortion, or fees related to dealing with the extortion.
- • Network security liability
- • Damages due to the theft of data on third-party systems.
Why Should Your Business Get Cyber Liability Coverage?
The usual business insurance policy only covers alleged “tangible” possessions and electronic data is not considered tangible under most policies. The more we depend on the Internet for everyday business tasks, the more we are at risk for cyber crime.
According to The American Institute of CPA’s, the top five most common forms of cyber crime are:
- 1. Tax-refund fraud
- 2. Corporate account takeover
- 3. Identity theft
- 4. Theft of sensitive data
- 5. Theft of intellectual property
Everyone is at risk for cyber crime regardless of your business size or industry. If you take the precautionary measure to secure your company now, you could be saving a pretty penny down the road.Request a Quote