What is Cyber Liability Insurance?
Yahoo’s 2013 data breach is one of the largest known hacks of user data in history. Though the hackers were later unveiled, the breach affected 3 billion accounts.
These are the instances you hear about…the big companies that get breached. Companies like Yahoo, Target, Adobe, LinkedIn, Facebook, and Marriot.
What you don’t hear about is that there are approximately 30,000 data breaches a day globally. Even more important for you, these don’t all happen at the large Fortune 500 companies. The majority of them happen to small-to-mid sized businesses.
Small-to-mid sized companies make good targets because many don’t or can’t spend the time and resources on data security that large companies can.
Still don’t have your attention? Here are some more statistics to show just how serious this issue is in today’s world.
· The total number of records compromised in 2020 exceeded 37 billion, a 141% increase compared to 2019
· 63% of cyber-attacks target small-to-mid sized businesses
· The average cost of a cyber-breach to a small-to-mid sized company is $86,550
Cyber liability insurance can help mitigate many costs associated with a data breach. It isn’t only for large corporations. Businesses of all sizes are investing in cyber liability insurance as it now seems a cyber-attack isn’t a question of “if”, but “when”.
What is Cyber Liability Insurance?
Cyber liability insurance is a form of specialty insurance for situations that aren’t typically covered under other traditional policies. Put simply, Cyber liability insurance helps your business overcome the cost of recovering from data breaches or cyber-attacks. These expenses could include:
· Customer notification
· Credit monitoring
· Legal expenses
· Fines associated with data loss
The cost of an attack can be detrimental to your business, with Kaspersky saying that the average cost of a data breach to a small-to-mid sized business is $86,550. Cyber criminals are more likely to target smaller businesses because:
· You’re less likely to have a strong defense against breaches
· How or where you store customer information
· How you conduct business online
· How you accept payments online
5 Reasons Why Cyber Liability Insurance is a Must Have
1. Data is not covered by standard insurance policies
Most businesses agree that data is one of their most important assets. Often, it’s worth more than the physical equipment where it’s stored. A standard insurance policy can’t respond to data that is lost, damaged, or hacked. Most cyber policies will cover data restoration and even rectification. Often these policies cover your data regardless of the manner it was lost as long as it’s within term limits.
2. Standard insurance does not cover business downtimes
Here’s an example: an employee of a doctor’s office left on bad terms. The office’s manager failed to change the assigned passwords that the employee used. Shortly after, the system began to behave erratically. Large amounts of data began to disappear and certain programs disappeared. Data, systems restoration, and business restoration took a couple days.
Imagine how much business you would lose in such a case. In most situations, while your system’s restoring often you can’t collect payments, take orders, or enter any new customer data. In most cases, Cyber insurance covers this loss of business and profits due to non-physical reasons.
3. Your reputation is your #1 asset
Your business definitely lives and dies by its reputation. When you run the risk of losing your customer’s trust, it can have more than financial ramifications for your business. Some Cyber insurance policies meet the cost of hiring a PR firm to start and rebuild your reputation, as well as cover loss of future sales due to current customer loss.
4. It won’t break the bank
You can usually get a cyber-liability policy for a very reasonable cost and can sometimes tailor it to your business needs.
5. Cyber liability insurance is becoming mandatory to get on jobs
Larger General Contractors are putting this coverage in place and a potential qualification to be considered for a job is that all subcontractors are now slowly being required to carry this coverage as well.
Protect Your Company
Cyber-crime is the fastest growing crime in the world. Cyber Liability insurance has become a must for all businesses, regardless of size.
Finding specialized coverage can be hard. Finding a broker who understands your business and its unique risk needs can be even harder. At Allied Insurance Brokers (a Gallagher Company), we can help your Crane, Rigging, & Specialized Transportation business protect against data breaches.
Contact Tres Whitlock at tres_whitlock@ajg.com with any questions.
