Most business owners focus on the need to purchase insurance for property claims, slips, trips, and falls, employees injured on the job, automobile accidents, and product liability, but many business owners do not recognize their exposure to cyber and privacy liability breaches. In today’s world of technological advancement, running a business is highly dependent upon the modern conveniences of utilizing computers, internet, social media, smart phones, networks, handheld devices, payment processing machines, email, etc., which has in turn GREATLY increased exposure to cyber/hacker attacks. According to a 2010 survey by Symantec Corp, 73 percent of all small and midsize companies worldwide have experienced a cyber-attack. This is a STAGGERING number of companies affected!!! In fact, 2011 saw some of the biggest data breaches ever reported.
There are numerous ways a company can become a target for cyber risk:
- An external hacker breaches a company’s internal systems
- A disgruntled employee leaves with personal client data
- A company website may collect personally identifiable information
- Customers’ and employees’ personal and financial information that sit on servers
- A lost company cell phone, iPad, or stolen laptop that includes private information
- And many more…
A cyber-attack can came from anyone with malicious intent. Attacks can come from with inside of an organization or from a complete stranger half way around the world, and it’s important to know that standard general liability insurance policies do not cover cyber liability claims.
Why Purchase Cyber Liability Insurance?
Cyber liability coverage is insurance for liability that arises out of unauthorized use or access to, data or software within your network or business. Listed below are some of the major protections that are afforded under a cyber-liability policy.
- Data Recovery – The cyber liability policy reimburses a company for all reasonable and necessary expenses required to recover and/or replace data that is compromised, damaged, lost, erased or corrupted.
- Privacy Violations – The cyber liability policy reimburses a company for fines and penalties associated with breach of federal state or local statutes related to personal medical or financial information.
- Notification Expense – The cyber liability policy reimburses a company for the cost of required notifications of privacy breaches, including all reasonable legal, public relations, advertising, IT forensic, call center, credit monitoring and postage expenses incurred.
- Network Security – The cyber liability policy reimburses a company for damages related to inadvertent transmission of harmful viruses, unauthorized access to sensitive information stored on computer systems, prevention of authorized access to computer systems, and failure to prevent identity theft or credit/debit card fraud.
Even though the business world is constantly evolving, Sovereign Risk Solutions is committed to staying on top of the most current issues, exposures, and insurance protections available in the marketplace. We pride ourselves in keeping our clients educated so they are able to stay ahead of the curve. If you have any questions please do not hesitate to contact us.
Inc. Magazine is talking about this topic as well.
Author: Alicia Furneaux