First in Protecting, Your Network.
As a modern day business owner, you’ve likely felt the push to become more web-involved. The Internet seems to be where businesses are concentrating efforts, whether they involve revamping your website to keep up with the competition or creating social media accounts to attract a new audience. Of course, charting a new business course presents new risks. Navigating the Internet can be difficult enough when dealing with multiple accounts, email marketing and search engine optimization, but you’re also responsible for protecting the information that you store there. Cyber liability insurance may be the answer.
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What does Cyber & Privacy Liability Insurance Cover?
Contrary to popular belief, nearly all businesses are susceptible to a cyber attack and your general liability policy may not cover the associated risks, which include loss of control over sensitive customer data.
To understand what protection cyber risk insurance provides, you must first understand the risk you face as a business. Cyber attacks don’t necessarily occur in the ether of Internet. Cyber attacks can also include computer hardware problems, communication media errors, system backup and operating system errors and even errors and fraud invoving internal people like system administrators.
A company can face three common types of cyber risks:
- Natural: The most common errors and losses result from severe weather. For example, a lightning strike or power surge can severely damage or destroy an entire database.
- Human error: These unintentional acts can involve something as simple as leaving a laptop that has access to patient medical records, at the airport.
- Intentional: This involves illegal criminal activity and can occur outside the organization, by hackers or criminals, or inside the organization.
No matter what kind of cyber attack you experience, the consequences of an attack can be expensive. In addition to retrieving information and establishing new cyber protocols, many companies have to perform clean-up efforts with a customer base. Cyber liability insurance can help with each step of recovery.
The Advantages of Cyber Liability Insurance
If the idea of losing your business due to hacking or even human error keeps you up at night, the cost of coverage may be worth the extra expense. Many businesses are getting these policies in place today to protect themselves from the unknown.
Fortunately, cyber risk insurance policies can now be tailored to your needs, and don’t necessarily have to be expensive. Since this is a new product not available through all insurance carriers, Trusted Choice member agents are an excellent resource, as they have the ability to scout for less common coverage. A member agent can also compare policies and seek the most affordable rate for you.
Look for a policy that covers business interruption as well as other aspects like notifying customers of data breach or data loss problems and hiring a PR firm to manage your public image. Some of these policies can also assist you before you are cyber-attacked.
Do I Need Cyber Liability Insurance?
Before purchasing a cyber liability policy, check your general liability policy, and assess your cyber activity and risks. If you realize that your general liability policy will cover small scale hacking and you rarely operate within the bounds of cyberspace, you might not need to buy a policy that provides additional cyber risk protection.
On the other hand, if you run payments through a POS system, or you run a health practice or law firm that stores sensitive client information on an online database, it’s possible that your general liability won’t fully handle the consequences of a data breach. Other institutions that might consider purchasing a policy include the following:
- Online retailers
- Health care providers and hospitals
- Educational institutions
- Financial, credit and banking institutions
- Technology companies
- Manufacturers and supply chain services
- Social service organizations