Business Insurance 101: Cyber Liability

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Business Insurance 101: Cyber Liability

Target Inc., one of the country’s retail businesses, disclosed that its payment systems had been hacked in November 2013. Their database had 70 million customer records taken, making it one of the biggest cyberattacks in history at the time. Yahoo (with over 3 billion user records), Microsoft, Facebook, J.P. Morgan/Chase Bank, Home Depot (another favorite), Marriott, Equifax, and Ebay have all had cyber attacks that resulted in the compromising of their consumer databases over the years. Cybercriminals now have access to billions of client records that they can use any way they see fit. This has not only damaged consumers’ trust in these big businesses, but it has also cost them billions of dollars in losses. Each of these companies has excellent teams managing their technology and online security. 

With those stats in mind, one has to think: “How vulnerable is my company to the same fate given the hacking of these major corporations and their top-tier tech teams?” Would the financial health of your small business suffer if you were found guilty of compromising your customer database? With 30,000 websites getting hacked on average every day, it might be time to add a Cyber Liability insurance policy to your suite of protections.  

What is Cyber Liability Insurance?

 Cyber Liability insurance is a policy specifically designed to protect you against financial loss from a cyber security incident. Events such as data breaches, online theft, ransomware extortion, and denial of service (DDOS) attacks.  

Most cyber liability insurance providers will also offer valuable advice for protecting client data, a variety of tools to assist in securing all of your company’s systems, and regular classes on cyber security in addition to financial safeguards. The following are some additional advantages of cyber liability: 

  • Forensic investigation (How did this breach happen?) 
  • Litigation Expenses 
  • Business Interruption expenses 
  • Crisis management  

 Cyber Liability carriers are making significant investments in the education component of preventing cyber assaults as a result of the predicted exponential growth in data breaches over the upcoming years. In addition to offering financial protection, picking the correct carrier for this coverage can be a fantastic resource for counseling on new technological trends.  

Do I need Cyber Liability Insurance? 

If you ask any insurance professional if your business needs cyber liability, you should get an astounding YES as an answer given the staggering amount of facts available. Contractors and other small businesses that accept payments are vulnerable. With all of their patient information stored online, doctors’ offices are highly sought-after targets. Retail establishments (like Target in the example above) have a wealth of client data. Financial services companies keep records of their client’s investments. Everyone should at least think about having some kind of cyber coverage, given how business has evolved and embraced technology. 

How can I get more information on Cyber Liability and purchase a policy?

Before we get started on how you may find out more or get a cyber liability policy, let me first clarify that the purpose of this essay is to raise awareness of a trend rather than to incite fear of being hacked. The use of technology in business is still a relatively new trend. The speed and efficiency that technology offers are one of its benefits; it is remarkable to see how quickly business can be conducted on a global scale. Even while technology’s benefits vastly outweigh its faults, it is important to be mindful of the risks involved. 

One of the best ways to obtain more information on Cyber Liability insurance and Data breaches is to contact an independent insurance agent that is technology driven. Tech-driven agencies are not only familiar with current digital trends, but being natural risk managers they will understand best practices in protection against loss. With that knowledge, they can team up with top-tier carriers that offer quality cyber liability products.  

If reading this article has sparked your interest in learning more about cyber liability and how to better protect your business from this emerging trend. Any of The Staples Agency’s digital specialists can be contacted. We are happy to engage in a detailed discussion and offer suggestions for enhancing the security of your company. 

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