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Posts Tagged ‘cyber liability’

If You Think You Need (Better) Cyber Insurance…You Probably Do.

Friday, September 22nd, 2017

Control is an Option to Command, by Frederico Cintra, licensed under CC BY 4.0

Image credit: Control is an Option to Command, by Frederico Cintra, licensed under CC BY 4.0

In the wake of high-profile data breaches where hackers humble multibillion dollar companies, questions like “Am I vulnerable to something like this?” or “Do I need cyber risk insurance?” inevitably rise in the minds of large and small business owners around the world.

Then they’re promptly forgotten.

Until the next time a similar story is reported on the news. (For example, the recent Equifax horror show.)

If you’re an IT professional in certain industries, you probably have no delusions about cyber risk insurance being a necessity; outside hacks for ransom and/or data breaches from within a company’s ranks are too common, and too costly. It’s a no-brainer.

Even if you’re not a motion picture CEO, or the Google VP, however, you need to be aware of the fact that you may have a cyber target on your back, or weaknesses within your company that could be exploited. A 2016 study by Symantec didn’t have “Movie Studio” or “Technology Giant” listed in the top five businesses affected by ransomware; service industries, manufacturing, finance/insurance, real estate, and public administration showed up as the most targeted. (Entertainment and technology services didn’t even make the top ten list, which included wholesale trade, transportation, communications, and utilities, retail, construction, mining, and Agriculture, Forestry and Fishing.)

Ransomware is affordable (it can be purchased for less than $2,000.00), and adapting as fast as protective software can be developed; Symantec found 101 new ransomware “families” in 2016. That number represents a 36% increase from previous years. While effective security measures and employee training are good protocols to have in place, a cyber insurance policy could mean the difference between returning to business after a breach, or shutting down.

Hacks for ransom (where a system is compromised and the hackers demand payment to restore it) represent only one type of data breach. Data leaks can be purposeful hacks (as with GoogleTarget, and HBO’s Game of Thrones nightmare), or accidental (like the incident with Whitehead Nursing Home or the mishap with the City of Calgary)…but the resulting public relations nightmares and potential for revenue loss are the same.

Don’t believe for a second that only large businesses are targeted; Symantec’s study found that smaller companies (251-500 employees) are more likely to be targeted by email malware, possibly for the very reason that they’re ill prepared to handle an attack.

As a business insurance sales specialist and the team leader of the INSURICA Insurance Management Network Technology Practice, James Roskopf knows what he’s talking about when he says that it’s a mistake to underestimate cyber risks and the people who perpetrate them.

“You have to remember,” Roskopf says, “That hackers are mean people.”

“A lot of people are still looking at cyber issues as a cost of doing business. If they get attacked with ransomware, they know that the FBI discourages paying hackers, but they also know that paying is the path of least resistance.”

There’s another Symantec statistic that proves Roskopf’s assertion about the cruelty of hackers, and puts to rest the notion that paying the ransom is ultimately less costly than an ongoing monthly insurance premium; only 47% of the victims of ransomware who pay the ransom are found to recover use of their stolen files.

Rather than relying on a criminal’s promise of good faith, a risk management program that includes cyber liability is the best way to forestall a business-ending security breach.

Cyber risk insurance coverage options can be scaled according to your business’s size and needs, and can include a budget for public relations repair if your customer’s data is compromised. Some other costs to consider that a good cyber liability policy can cover:

  • Security fixes and cyber forensics
  • Notification and identity protection for affected customers
  • Libel, copyright or infringement, and defamation (social media posts can take a minute to post, but have a long recovery period)
  • Damages to a third-party system (in case of an accidental virus transmission, for example)
  • System failure; hardware losses due to a natural disaster or malicious destruction would be covered under a commercial property or inland marine policy, but data and code losses would need electronic data protection coverage

Whether you’ve spent years building your business or you’re just starting…you can’t afford a catastrophe. A cyber risk policy for your company could be the safeguard it needs for a long, prosperous life.

Call us today at 1-855-279-9559 to discuss your cyber risk management plan. For the majority of businesses, a quote from an agent is available within five minutes, upon answering a few basic questions about your company.

Cyber Insurance

Tuesday, February 11th, 2014

Cyber insurance is the new kid on the block, but one you need to know.

Small mom and pop to a Fortune 500 company: every business can be the target of a data breach. In fact, recent studies shows over 30% of incidents take place in companies with 100 or less employees. In this day of being a data driven universe, companies of all sizes are being targeted and attacked.

One hacker, a lost laptop, phone or notebook can expose your company to serious risk.  Let’s not forget a virus or worm getting into your system.  One serious incident can put your company’s reputation, financial well being, and face a huge liability with dire consequences.

Cyber insurance offers liability coverage as protection against a claim of damages as the direct result of a data breach.  This coverage may include all network and security liability, communication and media liability, as well as legal costs, settlements and damage awards up to the limits of the policy.  This coverage may also cover software and data loss, fund transfers, e-commerce interruption and business interruption.

With cyber attacks being reported as increasing nearly 43% over the prior year, can you business afford not to consider cyber insurance?  What would happen to your business if it was facing any of the incidents described earlier? On a national basis, it has been shown that the average cost to remedy a serious attack or breach runs over 5 million dollars.  Can your company handle even one half or one third that amount?

Most general liability policies in place for business do not cover these types of incidents.  Take the time to talk to your commercial agent about cyber coverage and if it is an option for your company to consider.

Cyber Insurance & You!

Tuesday, December 10th, 2013

I keep hearing about cyber insurance, does my business need it?

We hear this a lot lately.

Cyber insurance covers lots of scenarios relating to loss and claims of damage in the high tech world we operate in today.  Ask yourself if your business could handle downtime from a crippling virus to your network.  Do you have sufficient cash on hand to handle the cost of repair, possibly new equipment or software, and pay the bills still coming in?

Cyber insurance goes by many names and handles a variety issues such as virus, hacked systems, and web liability, and others.  It could be described as e-commerce insurance, information systems, and so forth.  What should be done is to discuss options with your commercial insurance broker regarding types of cyber coverage.

Cyber insurance will cover the data/technology issues often excluded now in general business liability coverage. Often, you can pick options which will protect how your business is exposed in technology.  Like other policies, you will need to have certain safeguards in place like anti-virus and firewall protection to get a policy issued.  The carrier may wish an assessment done and look at password procedures, access, and network configuration.  Your agent and carrier can walk you through what could be needed.

Cyber insurance is a new breed of insurance.  Do your research as well.  Check with your state department of insurance for information.  Check the fine print of your existing policy to see if some computer, especially hardware claims may be covered.  Use that information as you tailor cyber coverage for your business with your commercial broker.

Cyber Liability

Tuesday, July 12th, 2011

There is a new risk in town.

 

And its’ name is Cyber Liability.  It goes along with identity theft of which we spoke a few days ago.  However, this is found in businesses.  The greatest threat is to smaller business operations. Cyber liability is when one breaches private information digitally. Not all commercial insurance policies cover this type of risk.  Most exclude coverage.  Cyber claims are generally before there is a specific loss, and mostly discovered by a third party reporting the breach to the company charged with the protection of private information.  Once the breach has been discovered is when costs began to incur, not necessarily when a client has suffered an actual loss.  We must ask how this happened.  What information has been compromised?  And how does this affect the client?  Are there any state or federal laws that must be considered?  Do we need to notify the client?  What remedies do we have available and at what cost? In addition, we must concentrate on stopping the breach and resolving that issue.

Will the General Liability policy have coverage for this?  Probably not.  General Liability coverage is designed to pay a third party after loss is suffered.  There may be some coverage under Professional Liability if not excluded.  Most technology and telecommunications companies have some coverage, but main street type, small business are not always covered.  Please contact your agent or one of ours to find out if you are protected.

 

Commercial Insurance.Net, LLC Advisor is not an attorney, accountant or certified financial planner and makes no representations or warranties to that effect.  Always check with your chosen professional as to statements made in this blog for your particular situation.