Most business owners, when looking for insurance, look for General Liability insurance, Error and Omissions Insurance, Workers Compensation but very few think about Cyber Liability Insurance. As a business owner you may be looking to protect your physical property, yourself and your personal property from errors in the workplace or employee accidents but what if there is a data breach? Even with the best business practices and security software, a data breach can, and in many cases does, happen. A data breach can not only hurt the company but it can also hurt the company’s employees and customers, which could then come back on the business.
“According to Ponemon Institute, which does independent research on privacy, data protection and information security policy 43% of companies have experienced a data breach in the past year. That’s up up 10% from the year before.” [USA Today]
“The Ponemon Institute survey also estimates 47 percent of all American adults have been affected by data breaches in the last year, with an estimated 432 online accounts being affected. Cybercrime has cost the U.S. economy $100 billion annually, making the U.S. the hardest hit of any country, according to a report from Intel Security and the Center for Strategic and International Studies.” [5 Data Breach Statistics Worth Knowing]
The recent expansion of technology and the mass number of new online businesses have attracted a new criminal enterprise in cyber hacking. From stealing private data to implanting bugs and viruses, the potential damage can be substantial. Hackers are not just going after the large organizations you see on the nightly news; they are also targeting small- and medium-sized businesses that are not protected.
Insurance companies have evolved and created policies designed to indemnify clients for these types of perils.
Cyber Liability Coverage is a key component for any business with a web based exposure.
The policies are designed to provide first party coverage for:
- – Loss of digital assets as a result of damage or corruption of the insureds electronic data or programs.
- – Business income losses during the period that the insureds systems are being restored.
- – Proactive security measures including customer notification, fines and/ or penalties, and customer relations expenditures.
- – Reimbursement of expenses due to an extortion threat to the insureds computer systems.
- – Cyber Terrorism including loss of income, interruption, and expenses as a result of failure of the insureds system due to an act of terrorism.
In addition, the policies also provide third party protection coverage for:
- – Network security and privacy liability including a security breach due to violations of HIPAA or other protection laws and regulations.
- – Privacy Liability for employees as a result of a security breach in which employee data is compromised.
- – Electronic media coverage including claims arising from defamation, libel, slander, invasion of an individual’s rights, plagiarism, copyright infringement, or domain name infringement.
Business exposure to cybercrime is at an all-time high, and one instance can completely cripple or kill a business. Cyber Liability coverage is designed to eliminate that as a possibility, so businesses can continue to focus on what they do best!