Cyber liability insurance is becoming more important for businesses of all sizes.
Right now, if your business uses the internet at all, you are at risk for a cyberattack. And as technology continues to progress, the importance of having a strong cyber liability insurance policy will grow.
What is a cyberattack?
A cyberattack is any attack against a computer, multiple computers or a network. There are two main goals in cyberattacks:
- Disable a target or take it offline
- Get access to data and/or gain admin privileges
Malware, phishing, denial of service attacks, etc. are just a few of the possible technical methods deployed by cybercriminals. And as technology continues to evolve and become more sophisticated, so do potential threats.
How does cyber liability insurance work?
Cyber liability insurance (sometimes called cyber risk insurance) protects you from claims against your business that arise as a result of a cyberattack.
For example, imagine you have a data breach – either internally or through your third-party service provider. Having the right cyber liability insurance policy in place would help you recoup the investigation and forensic expenses associated with the attack. For even a small breach, the costs for investigation and forensics can easily bankrupt a company that doesn’t have coverage in place.
Now imagine that your business is the target of a denial of service attack. (This is something that can happen to any organization that owns a website.) Your website – your main source of your online business or online leads – is taken down for several days. You suddenly realize the cost of lost sales is a cost you can’t afford. That’s why business interruption insurance loss reimbursement is a key component of cyber risk insurance and is an important part of recovering from a cyberattack successfully.
Cyber related losses may not be covered by your general liability insurance.
Many business owners have waited too long to realize that cyber threats require cyber insurance. The nature and scope of the damage that can be done in a cyberattack is completely beyond the coverage traditionally offered in general liability insurance. No matter what business you are in, if you have a business website and/or if you collect any type of customer data – you should talk to an insurance professional about cyber risk insurance.
Make sure you’re covered before a cyberattack strikes.
Cyberattacks may target your computer or network but their impact goes far beyond – putting your business, your customers, and your reputation at risk. That’s why cyber risk insurance (cyber liability insurance) includes a range of coverage that includes some things you probably would never imagine you’d need.
Data breach coverage protects you from the overall costs of the security fixes, identity theft protection for those impacted by the breach, and protection from the costs of possible legal action.
Cyberattacks can lead to an IT failure that disrupts business operations – costing you both money and time. Business interruption loss reimbursement could cover the loss of your income during an interruption. As well as the increased costs your business faces recovering from an attack.
When your business becomes a target of a ransomware or other malware attack, your business is effectively held hostage until a steep fee is paid. Having the right policy in place will mean that you can recoup the losses related to cyber extortion.
Cyber risk insurance can also help cover the cost of forensic, public relations and legal support to ensure your business can afford to get the expert advice it needs to determine the extent of the attack and deal with the various repercussions.
An experienced insurance broker can help you decide what you need.
The best way to make sure you know you have the right cyber risk insurance coverage is to talk to an experienced insurance broker. Establishing a strong relationship with your broker will ensure you have the coverage you need, you understand what you have, and you know who to contact if you ever do fall victim to an attack.