With the growing expanse and reach of the Internet-dominated business arena, more and more companies store sensitive information on their computers. These computers connect to the internet and the clouds, which leaves room for a potential security breach. From company information and intellectual property to sensitive client data, you must protect your company from a potential breach.
Regardless of how large or small your organisation, investing in cyber liability insurance coverage is a necessity to protect your business from the potentially devastating effects of a cyber-attack.
The Costs of Data Breach Recovery
When cyber criminals gain access to company databases, they gain access to a wide range array of information, including employee and client’s Social Security numbers, personal information, addresses, credit card numbers, and other sensitive identifying data.
Additionally, they may gain access to sensitive trade secrets, technology, and other valuable intellectual property.
Recovering from a data breach can obligate companies to hundreds of thousands of dollars in fines, and even more – the loss of reputation. Other expenses include business interruptions, security overhauls, concessions to clients, and even business closures.
Interruptions to Productivity and Operations
When a business falls victim to a cyber attack, it often hinders productivity and daily operations. After a cyber attack, an organisation must launch an investigation to determine the source and impact of any data breaches.
Additionally, they may also experience decreased sales due which result from any negative publicity and diminished customer confidence pertaining to the data breach. This costs time and money.
When a company experiences a data breach, they must update their security systems. This will not only deter future breaches but it will also help to repair the trust lost during the initial cyber attack.
Implementing or updating a new security system requires new software, infrastructure, and personnel. Additionally, security overhauls also require training staff in new procedures, policies, systems, and technologies – all of which costs a great deal of money and time.
Repairing Customer Relations
As a sign of goodwill, many businesses impacted by data damaging breaches offer services to customers for a specified period of time after they occur (such as credit monitoring services). To regain their trust and good favor, they may also offer perks and incentives, such as discounts, free products, or service promotions. All of these incentives and services cost a great deal of money.
What does Cyber Liability Insurance Cover
Cyber Liability and Privacy Insurance covers a variety of both liability and property losses which may result when a business engages in various electronic activities and their security is compromised.
Cyber and privacy policies coverage may include covering –
- Company liability for a data breach in which the firm’s customers’ personal information is exposed or stolen from the firm’s electronic network.
- Notification costs and credit monitoring.
- Costs to defend claims by state regulators, fines and penalties, and loss resulting from identity theft.
In addition, the policies cover liability arising from website media content, as well as property exposures from: (a) business interruption, (b) data loss/destruction, (c) computer fraud, (d) funds transfer loss, and (e) cyber extortion.
Cyber Security Insurance and Overall Security Strategy
While cyber liability insurance will not prevent a data breach from occurring, investing in cyber liability insurance is essential if you store sensitive data online. Regardless of the age, size, industry, or number of clients your company possesses, cyber liability insurance will protect your assets in the event of an electronic data breach.
Does your company’s data breach response plan include cyber liability insurance? If you are interested in learning more about cyber insurance to protect your company in the event of a cyber attack, contact a member of our team today.