June 11, 2016
Cyber Liability Insurance: Why It Is More Dire Than You Think
A business cannot afford many setbacks, so it is imperative that you do your best to make sure that every possible setback is covered. Some businesses are covered for certain issues that might occur, such as an electrical problem or theft. But one of the most overlooked issues–which also happens to be an increasingly growing threat–is a cyber attack. It is essential that a business secures reliable cyber liability insurance as soon as possible.
Understanding the Growing Threat
The truth is that many criminals are starting to get more sophisticated with their tactics of attack. More and more criminals are becoming cyber criminals and are quite effective. No target is too large or small, and this is something that every business owner needs to be aware of. Keep in mind that there were around 342 data breaches that exposed the information of 9,015,970 customers from giant companies, like American Express, Home Depot, and even North Dakota University. This happened in early 2014.
The Bangladesh Bank suffered an attack back in February, 2016 where the criminal actually took 81 million dollars without forced entry or holding up the bank. This was all done through a computer with the touch of a few buttons.
These are just examples of the kinds of dangers that businesses face when it comes to cyber attacks. Cyber attacks will not only expose fragile information; to recover from a breach, businesses and other agencies have to pay a lot of money to fix the problem. This could include revamping security, re-establishing brand trust, or even dealing with lawsuits brought against the business or agency. It is estimated that cyber attacks costs 300 billion to 1 trillion dollars in just one year.
Another thing that you have to remember is that there are about 400 new threats every single minute that are targeting various types of businesses or entities. Most of these attacks go undetected due to inadequate security settings among other factors.
You can ensure that your business is up-to-date when it comes to firewalls and anti-malware protection. But you should also make sure that you have a specialist that you can count on should any suspicious attack occur. You do not have to hire a team of specialists because some professionals work as freelancers; it is your choice. Cyber security teams can isolate the issue before it can cause any more damage. You can also ensure that your employees take a few classes to learn a little about cyber security and safe network usage, just to be safe.
Keep in mind that these are just a few tips that may help keep your company safer, but they are in no way guarantees. It is still important that you protect yourself and your company, just in case it becomes a victim of a cyber attack.
How Cyber Liability Insurance Can Help
Cyber liability includes several factors and many of them depend on the company’s specific needs. But there are a few common issues that are usually covered, like E&O or errors and omissions. This part of the insurance covers any claim that might be brought to the company due to the performance of the business.
Another problem that is usually covered is media damage. The internet is a cesspool of information, and bad news travels quickly. A business might have to deal with advertisement damage, libel, slander, or even trademark infringement, which might occur during a data breach. Cyber liability insurance should be able to cover some of these costs. Keep in mind that any loss suffered after the breach is usually not covered, such as a failed re-branding of your business. However, expenses incurred for public relations, which will help your image are covered.
The insurance could also cover network security issues. You should understand that a breach could include the destruction of sensitive customer data or even cyber extortion should the data be that sensitive. Some attackers may be attempting to shut down your entire network just for kicks. Any of these issues could be quite costly to deal with, which is another reason why it is important to be covered.
These are just some of the areas that cyber insurance can cover. You should know that there will be some costs immediately after the breach that you should not have to deal with on your own. For example, there should be a forensic investigation of the breach that can help identify the issue and also prove the problem had nothing to do with you.
The cost of legal advice should also be covered under your insurance. This will help you identify any regulatory obligations regarding the breach, customers, and even employees.
You may need to contact your customers immediately. One thing that can be done is offering free credit monitoring to your customers due to the breach. Keep in mind that credit monitoring may actually get expensive, especially if you have a lot of customers. Of course you can customize this customer gift to your particular business, but it is wise to make sure your customers know that you care and are making steps to increase security.
Perhaps one of the most important aspects of a cyber liability insurance contract deals with how they will deal with any loss of profits during the breach. Your entire network, therefore, business will be down for a while until the issue is resolved. The insurance company that you hire should guarantee a specific amount of coverage should this occur.
These are just some of the reasons why cyber liability insurance is becoming a pressing necessity. There are simply too many dangers that can end up costing a business more than they can spare. Be sure to consider getting coverage as soon as possible.