Why Should Businesses Consider Cyber Liability Insurance?

Written by Marcel Manning on October 1, 2019 Under Who can you trust with your business technology?

Businesses Should Consider Cyber Liability Insurance

Businesses that deal with sensitive information, such as legal, healthcare and financial institutions, should consider a cyber insurance policy to help them recover from financial losses associated with successful data breaches.  

The internet is used by more and more businesses to conduct their operations. Whether you take orders and payments or advertise online, the internet is your gateway to customers around the world.

As part of the deal, you have to take the darker sides of the web, which includes hackers and bad actors that try to steal your data. As a business, it’s important to consider all possible means to secure your company and client data. One of the best ways to do this is to buy cyber insurance products. Find out more about the types of cyberattacks that can affect your organization and the best options to protect it from data breaches.

What Is A Cyberattack?

Today’s headlines are full of malicious attacks planned and unleashed on local schools, governments and organizations. A cyberattack is any deliberate attempt to breach your firewall and access sensitive data.

Sometimes, cybercriminals just want to disrupt your operations, but usually, they try to steal payment details and the personal information of your clients stored on secure servers. This poses a risk to your enterprise and all customers whose data is compromised. It takes a long time to build trust with clients, vendors and partners once a breach has occurred — lawsuits are sometimes brought against the company and this can lead to financial ruin.

Other fall out includes identity theft, credit card fraud, ransomware, and email hacking. Criminals constantly look for new ways to trick employees into giving up sensitive data or attack small and large corporations through vulnerabilities in their security protocols.

How Frequently Do Cyberattacks Happen?

FBI statistics from the Internet Crime Complaint Center show that damages due to online exploitation and fraud totaled a mind-boggling $2.7 billion in 2018. In fact, cybercrime is the fastest-growing type of crime in the United States, as more and more organizations are discovering for themselves.

Attempted data breaches occur every hour of the day from a wide variety of attackers. Dedicated teams in the government and private sectors monitor, report and block thousands of attempts each year — but some slip through. Working with a vendor that specializes in cybersecurity helps ensure that your business data is always safe and secure.

What Is Cyber Insurance?

Cyber insurance covers your business for data breaches that compromise customer information. This may include Social Security numbers, account numbers, driver’s license numbers, credit card information or health records.

Here are the various coverage options on most cyber insurance policies:

• Investigation Coverage – gives you the funds to investigate why the breach occurred and how to prevent future attacks. This process often involves a security firm, the FBI and local law enforcement.
• Customer Notification – If your organization falls prey to a cyberattack, you have to notify customers of the breach and when it happened. Depending on your state cyber laws, you may be required to monitor any activity on compromised accounts.
• Business Losses – this coverage pays for losses due to business interruption, network downtime, data loss recovery and the other costs involved in repairing your system and damaged reputation.
• Lawsuits and extortion – This includes any legal costs involving the unauthorized access of confidential data, such as legal settlements and regulatory fines.

Businesses that deal with sensitive information, such as legal, healthcare and financial institutions, should consider a cyber insurance policy to help them recover from financial losses associated with successful data breaches.