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Posts Tagged ‘data breach insurance’

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.

Data Breach Insurance and Your Company

Monday, May 5th, 2014

You cannot pick up a newspaper or turn on the television or radio without hearing the news that yet another large company which positively everyone uses has “suffered a breach.”

Last year alone, there were almost 200 hacks of payment systems which are used by hotels, restaurants, and retailers. In 2013, Target had 40 million debit and credit card numbers stolen from their computers.

And it’s not just retail shopping which has been affected. In the first few months of 2014, millions of consumers had their personal, banking, and/or credit information lifted from Apple, Kaiser Permanente, the California Department of Motor Vehicles,  national credit agency Experian,

and even Veterans of Foreign Wars of the United States.

If it can happen to these huge companies, you’d better believe it could happen to you!

It is important that you talk to your licensed insurance professional about data breach insurance, often called cyber liability insurance. Data breach insurance covers you in the event of such events as unauthorized access or use of data, loss of data, whether malicious or accidental, denial of service attacks, cyber extortion, or disclosure of confidential data.

Covered losses may include the investigation and forensic costs to figure out how the breach happened, and what was exposed. It can also cover damage to your company’s reputation, the costs of notifying those who are affected, the costs associated with monitoring credit going forward, lost business, and attorney fees, settlements or judgements, and court costs.

Again, talk to your insurance professional to ensure that all of your data breach risks are covered.

Types of Insurance You Should Know About

Thursday, February 27th, 2014

What kind of insurance does your business need? What kind of insurance may be overlooked? What if you’re a home based business or working in a leased space?

There are plenty of questions and types of policies.  Certainly, a starting point for any business is a general liability policy and a property insurance policy.  Beyond that, let’s look at other coverage options you should be asking your agent about:

Cyber Theft of your Business Bank Account: Over1 billion dollars a year is stolen from business bank accounts and credit card processing, according to Bloomberg News. Of these, over 70% are stolen via fraud attacks. There’s a new product on the market that will cover your commercial business account against cyber theft or fraudulent wire transfers. Under the current banking laws, FDIC insurance doesn’t cover small business bank fraud; it only covers you against your bank becoming insolvent and folding.

Errors and Omissions Insurance:  Also known as professional liability insurance, this covers anyone who presents themselves as an expert and provides advice or consulting services for a fee. If a project goes poorly and the client sues, you will be covered for your legal fees and defense costs. Consider a million dollar coverage as a starting point in protecting your business.

Commercial Liability Umbrella Insurance: This is extra insurance if you exceed the limits on your general liability policy or commercial auto policy. It is typically bought in one million dollar increments.

Data Breach:  If the business stores sensitive or non-public information about employees or clients on their computers, servers or in paper files they are responsible for protecting that information.  If a breach occurs either electronically or from a paper file, this policy will provide protection against the loss and damages.

Directors and Officers Insurance: This insurance protects  the officers and board of a company against their actions that affect the profitability or operations of the company. If a director or officer of your company, as a direct result of their actions on the job, finds him or herself in a legal situation, this type of insurance can cover costs or damages lost as a result of a lawsuit.

Don’t be shy about asking your agent if these or other types of coverage are available or need to be considered.  The ultimate responsibility of protecting your business falls squarely on you as the business owner.