Cyber Liability/Data Breach Insurance
Recently, a number of well-known companies have been the targets of hard hitting cyber-attacks. These attacks left the private information of millions and millions of consumers exposed. With tens of thousands of customers conducting business transactions over the Internet each year, it is vital that you understand your potential legal exposure to a data breach.
In the event of a cyber-attack, you most likely will not be covered under your standard business liability insurance policy. Therefore, you will need to make certain that you, your customers and your business are protected adequately with the best cyber liability insurance available.
Liability for the loss of employee or customer data is not usually covered under a typical business insurance policy. A small number of existing insurance policies that provide directors and officers liability and general liability may provide limited coverage in this area. However, many CEOs have found that there is a significant gap in their coverage after they have experienced an attack. By that time, it is unfortunately too late to do anything about it. That is not a boat in which you want to find yourself.
Recent studies have found that well over half of public companies do without cyber liability insurance, even when cyber security risk has been identified as one of their top concerns. In the meantime, around twenty-five percent of those companies anticipate a data breach within the next year.
One common misconception regarding cyber liability is that it is the higher profile companies that are at the greatest risk. The fact of the matter is that the small and medium-sized companies are in fact at risk as well, if not even more so. The average cost of a data breach is more than five million dollars and all businesses are at risk. This means that regardless of the size of the business that you own, you need to contact Risman Insurance Agency to make sure you are protected with efficient cyber risk insurance.
The sad truth is that just over a third of companies invest in cyber security insurance. Many business executives are not even aware that cyber insurance exists. Those that have heard of data breach insurance do not believe that they are susceptible to an attack. Others are simply not very concerned with the potential fallout of a data breach. On the other hand, there are many more business owners out there that feel the cost of data insurance is not worth paying.
The Cost of Cyber Risk Insurance
To a certain degree, the cost of your cyber liability insurance premium is based on the particular industry in which you do business. For instance, if you own an ecommerce company that works solely with online transactions and stores customers’ personal data, such as credit card information, then you may be considered to be at a higher risk for a cyber-attack. Also considered high risk companies are institutions in the medical field, which often store vital data like social security numbers, birthdates and medical records. The greater the exposure, the higher the risk; thus, the premium for cyber security insurance will be slightly higher.
Fortunately, as with most types of insurance, it is possible to reduce the cost of your cyber insurance premium. One of the most important ways to save money is by reinforcing security practices. This is similar to the good driver discount that you get on your auto insurance policy. In addition, increasing security does more than lower the cost of your insurance premium, it also reduces the overall risk of being attacked.
How Cyber Insurance Protects Your Business
In order to better comprehend the protection that is provided to your business by investing in quality cyber risk insurance, you must first understand the risks that your business face. A cyber-attack does not necessarily take place only over the Internet or Ethernet.
The fact is that a data breach can also be the result of problems with your computer hardware, as well as operating system errors, system backup errors and communication media errors. As a matter of fact, fraud and errors that involve people within your company, such as system administrator, are also a major concern.
To put it simply, there are three main areas of cyber risk:
- Human error – unintentional acts, such as leaving patient records out in the open for wandering eyes to see
- Intentional – illegal malicious activity, such as by hackers and other criminals
- Natural – loss or errors due to severe weather, such as power surges and lightning strikes
Regardless of the type of cyber-attack or data breach you experience, the results can be rather costly. Do not wait until you are trying to retrieve lost information, establish new protocols and perform cleanups, then it will be too late. Act now and protect your company as soon as possible by clicking on the quote request button now.