Cyber Liability Insurance – It’s not just for Big companies anymore
Cyber attacks are on the rise with every size business, which means you don’t have to be Target or Home Depot to be exposed to cyber hacking or have a data breach of customer’s information. Nearly all business that utilize any form of (IT) information technology to communicate with customers is at risk. It could be something as simple as emails, information gathered on your company website or customer data stored on your hard drives. You need cyber liability insurance in addition to a general liability policy.
Small Businesses are at most risk
According to the Department of Homeland Security the largest growth area for targeted cyber-attacks are businesses with fewer than 250 employees. With 44% of small businesses reporting being victim of a cyber-attack, and 59% of U.S. small and medium sized businesses do not have a contingency plan that outlines procedures for responding to and reporting data breach losses.
Breaches Reported to the U.S. Secret Service and FBI are showing 27% of attacks targeted businesses with over 100 employees, but the vast majority 63% of attacks targeted businesses with 100 or fewer employees
“Small companies, which are making the leap to computerized systems and digital records, are attractive targets for hackers”
Cost of a Cyber attack can range from tens of thousands to millions
Crisis Services: Forensics, Notification, Legal Guidance, Public Relations, Legal Damages
Legal Defense: Legal Settlement
Regulatory Action: Regulatory Defense, Regulatory Settlement
PCI DDS: Payment Card Industry Data Security Standard fines
Credit Card Company Fines
Even if a company is 100% PCI compliant and validated, a breach in cardholder data may still occur. Cardholder Breaches can result in the following losses for a merchant.
•$50-$90 fine per cardholder data compromised
•Suspension of credit card acceptance by a merchant’s credit card account provider
•Loss of reputation with customers, suppliers, and partners
•Possible civil litigation from breached customers
•Loss of customer trust which effects future sales
“Visa estimates about 95% of the credit-card data breaches it discovers are on its smallest business customers”
System Recovery – Repairing or replacing computer systems or lost data can result in significant costs. In addition, your company may not be able to remain operational while your system is down, resulting in further losses.
Steps to Reduce Cyber Liability Risks
Because computing technology changes rapidly, there is no absolutely sure-fire way to protect digital data and computer systems. In addition, technologies deemed to be highly secure can later develop vulnerabilities or be found to be vulnerable all along. You may be able to limit your cyber liability risk by:
- Installing, maintaining and updating security software and hardware.
- Contracting with an IT security services vendor.
- Using cloud computing services.
- Regularly backing up data at a secure offsite location.
What Cyber Liability Insurance Covers?
Some standard business insurance policies, such as a Business Owners Policy (BOP), may provide coverage for certain types of cyber incidents. For instance, if you lose electronic data as a result of a computer virus or hardware failure, your insurance may pay recovery or replacement costs. To extend coverage for a fuller range of cyber liability risks, you will need to purchase a stand-alone or in some cases add cyber liability coverage to a policy, customized for your business. This type of policy can cover several types of risk, including:
- Loss or corruption of data.
- Business interruption.
- Multiple types of liability.
- Identity theft.
- Cyber extortion.
- Reputation recovery.
For more information, visit: www.InsuranceBrokersGroup.com or call 800-459-6060.