The need for cyber insurance is real. If you answer yes to any of these questions, you most likely need a cyber insurance policy:
- Does your business have a website?
- Does your business bank online?
- Does your business accept credit card payments?
- Does your business use Facebook, Twitter, or LinkedIn?
- Does your business store sensitive customer or employee data?
Cyber Insurance helps protect businesses from computer, network, and internet-based risks. The policy covers both first-and third-party loss. Every business that uses the internet, accepts credit cards, or uses a system network could benefit from cyber insurance.
5 Good Reasons You Should Have Cyber Liability Insurance
Imagine for a moment that your company has come under attack by a skilled hacker. The hacker has accessed your customers’ names and contact information–and worse–your employees’ social security numbers. On top of that, your website is disabled so that you can’t take orders or collect the payments you need to stay in business. Wouldn’t it be nice to have cyber liability insurance right about now?
Insurance that protects you in case of a cyber-attack may seem like something only large corporations would ever need, or could ever afford. But believe it or not, cyber liability insurance makes lots of sense for small companies as well. Here’s why
- It’s more affordable than you think.
Policies premiums can start as low as $2,000 a year, though it can go up from there. You can get coverage as high as $30 million and deductibles as low as $10,000, depending on your needs and what you’re willing to pay. Cyber liability insurance is still a fairly new concept, so there’s a lot of variation among policies, and a lot of room for negotiation.
- It can cover more than you think.
Many policies offer “first party” coverage–that is, they will pay you for things like business interruption, the cost of notifying customers of a breach, and even the expense of hiring a public relations firm to repair any damage done to your image as a result of a cyber-attack. Having this cash available in the event of a crippling hack can keep the lights on till you’re able to resume your normal cash flow. A good policy can even cover any regulatory fines or penalties you might incur because of a data breach.
Business interruption coverage can be especially important for a small business which may not be as diversified as a larger one, or have the same financial resources. If a larger company has one line of business shut down by a data breach, it may be able to depend on its other lines for revenue. A smaller company may only have one line of business.
- You probably don’t have a risk management team.
Big corporations have entire departments devoted to analyzing the risks the company could face and helping set policies and procedures to protect against them. You don’t–but a good insurance carrier can perform a similar function.
“There are a couple of ways insurance can bridge that gap. Your insurer may well be willing to help with these areas because the better protected you are, the less likely you are to have a breach that could result in a claim.
- Even if you don’t host your data yourself, you’re still responsible.
Is your website and any of your data hosted or stored in the cloud? Take a good look at your contracts: You’re still legally responsible. You can’t fully control how a cloud provider handles your data but an insurance policy can protect you if your cloud provider screws up.
- Your general policy won’t cover you.
Typically, a General Liability Policy specifically excludes losses incurred because of the Internet so a good Cyber Liability Policy can pick up where your general policy leaves off.
Make sure your Cyber Policy covers laptops and mobile devices as well, to give yourself coverage in as many situations as you can. “Work with your broker to integrate cyber liability with your general policy and employment liability policy. You want to give yourself the most seamless coverage possible.
THESE ARE REAL-LIFE CASES OF CYBER EXPOSURES AND HOW CYBER INSURANCE POLICY RESPONDS :
SOCIAL ENGINEERING: An employee is tricked into sending money to an imposter
pretending to be a company manager, customer, or vendor.
Reimburses you for the money lost from a social
FUNDS TRANSFER FRAUD: A hacker breaks into your computer system and gains access
to your online banking account. The hacker uses his access
to request a funds transfer.
Covers the money lost but not reimbursed from a
criminal fraudulently issuing instructions to your bank to
electronically transfer funds.
RANSOMWARE: An employee unknowingly opens a link in an email that
contains a computer virus. The virus immediately begins
encrypting files on your network. The criminals reach out to you
demanding $5,000 in return for unlocking the company’s files.
Covers the ransom in excess of the deductible to unlock
your files after consultation with the Insurer.
Under the vast majority of circumstances, the ransom will not be paid
or it may be illegal to pay pursuant to the Office of Foreign Assets
Control regulations. This example is provided to illustrate that ransom
payments may be covered under the policy.
NETWORK INTERRUPTION: A computer virus brings down your customer order system.
It takes three days before technicians can get it up and
Reimburses lost profits and any extra expenses incurred
while systems were down after an initial 8-hour down
DATA BREACH: A hacker gets past your security controls and breaches your
network. Customer data records which included sensitive
personally identifiable information were stolen. However, the
extent of the breach and the number of records implicated is
undetermined without a further security review.
– Legal fees, security experts, PR consultants,
notification costs, and identity theft protection for
customers impacted by the breach;
– PCI fines and penalties; and
– Defense and settlement costs for related lawsuits.
NETWORK SECURITY: Your website was hit with a virus that flooded your network
with 10 times the normal traffic, rendering your system
inoperable. The virus was transmitted to several key customer
websites, bringing their systems down as well.
Covers lawsuits brought by those customers impacted by
the virus transmissions and covers the cost to repair any
damage to your data files.
YOUR CYBER EXPOSURE HOW OUR CYBER INSURANCE POLICY RESPONDS
MEDIA AND CYBER CRIME LIABILTY:
– A customer posted a complaint on your Facebook page. An
employee posted a reply accusing the customer of lying.
– A customer sues alleging you violated HIPPA as a result of
the theft of customer health information.
– Covers content related lawsuits for defamatory and
slanderous comments made by your company on its
social media accounts.
– Covers defense costs in defending the lawsuit and
settlement payment of covered losses.