A New Business’s Guide To Cyber Liability Insurance
Whether you realize it or not, right now, you are at risk. Cybercrime has become so common place in today’s modern world that it is hard to ignore it. In the last few years, some of the biggest brand names have had their systems hacked into and data stolen.
What is worrying, is that this is only the tip of the iceberg. In 2014, there were a reported one billion records stolen, and while 2015 figures haven’t yet been released, it is unlikely to have reduced.
Such breaches can be very expensive and they can be so costly that organizations sometimes go bankrupt just settling the claims made against them. That is why it is crucial that your business has some form of cyber liability insurance.
Cyber liability insurance coverage has been available for about ten years. However, for some reason, many security professionals and business leaders don’t know much about it or how it can benefit them in the long-term.
The US Regulations
It is important to note that in the United States, all but four states have regulations that insist an organization must notify those affected, and authorities when there has been a data breach. Other nations also have similar laws and regulations.
One of the biggest costs of a data breach is the notification.
Another challenge for cyber insurance is that the industry, until now, has not had one policy to cover all aspects of the risk. Many insurers, not understanding the challenges that a business can be subjected to, tended to offer many different policies that might not have covered all the risk.
In recent years, with the rise in high profile cases, this has changed and there are now policies that are fully assessing the risk. However, if you have an old insurance policy, it might be wise to seek advice to see if you are fully covered.
The Current Coverage Options
Currently cyber liability insurance coverage can include any of the following:
- Crisis management of the data breach – this is there for management of any incident where there has been a potential data breach. It will also include the investigation of how the breach occurred, the remediation, notification to those affected, credit checks for those affected, and all legal costs including any fines levied against the company.
- Media Liability Coverage – this is to protect the company from any damages to a website, or intellectual property infringement. This is particularly useful for graphical artists or those in a creative industry. Though anyone with a website should consider this as a priority as well.
- Extortion Liability Coverage – this typically protects an individual or company from losses incurred from the threat of extortion. This might include professional fees related to dealing with the extortion.
- Network security liability – this is to protect your company from denial of access, data breaches on third party suppliers or costs related to the theft of data on third party systems.
You might also have a problem when your existing policies overlap, therefore paying too much for certain coverage. Again, if you have an existing coverage, it is highly recommended that you consult with an insurance expert on what you need.
The Final Costs
It is important to remember that your organization is at risk from cybercrime. The average company is losing $7.7 million every yearfrom cybercrime and some companies have seen losses in excess of $65 million. Don’t let your organization be one of those that goes bankrupt because you haven’t properly protected your business from the risks out there.
Have you been a victim of a data breach? How much did it cost your company?