Does Your Business Need Cyber Liability Insurance?

Guilty Viewing Pleasures: Hackers by Ingrid Richter from Flickr (Creative Commons License)

Guilty Viewing Pleasures: Hackers by Ingrid Richter from Flickr (Creative Commons License)

Anthem Health Insurance was victim the latest cyber attack to hit the news. Approximately 80 million customers’ health records were compromised by this security breach. When you hear about these hacking stories, do they make you wonder about your company’s security system? Do you assume that you probably have nothing to worry about because hackers are only interested in big companies like Target?

I attended a workshop last month about cyber liability insurance where the presenter said that a 2011 study revealed that 95% of all credit card breaches were against small businesses. We only tend to hear about the security breaches involving bigger companies but any size company could be at risk. Data breaches can occur through hacking, theft by unauthorized access , employee errors, and stolen or lost paper or electronic files, laptops, smartphones, flash drives.

Any business that handles or stores private business, customer, or employee data should consider getting insurance to cover them if a data breach occurs. This data includes social security numbers, bank account information, credit card numbers, driver’s license numbers, and email address. Additionally, you should take a look at your company’s policies and procedures related to data security. Are you taking the following precautions?

  • Secure sensitive data
  • Restrict access to data
  • Dispose of data properly – i.e., wipe laptops before donating them, shred paper files
  • Use effective passwords
  • Use encryption and secure remote access
  • Make sure your employees understand how to protect data and why it’s important

There are many benefits of having cyber liability insurance. Your provider should offer risk management services to help prevent a data breach from occurring. If a breach occurs, they will can professional assistance for damage control and regulatory compliance as well as cover the response expenses for mailing notification letters, credit monitoring services, and public relations. Your cyber liability insurance policy can also cover your defense and liability expenses if you are sued because of the breach.

This is a serious issue that can affect any company that uses the internet for business or commerce. If you have a traditional business liability insurance policy, read the terms carefully; it may not cover cyber liability. If you need a cyber liability insurance policy, contact a cyber liability insurance specialist to discuss your needs and options.

If you have questions or want to chat more about these issues, feel free to connect with me on TwitterFacebookLinkedIn, or you can send me an email.

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Comments

  1. My large insurance company was hit by a cyber breach recently, I didn’t realize that it was more common for smaller businesses to get hit. I hope to open a couple of small businesses in the future. With everything being on the web these days, and even more so in the future, this is something I’ll definitely need to consider. Thanks!

  2. I had no idea that cyber liability was something that could be a concern for businesses. I just started up a business, so I would really like to be sure that we prevent any data breaches from happening. If they do happen, I think it would be really nice to have insurance that could help cover any of these problems. Now I would just like to take these precautions that you mention to be sure that we aren’t at risk for any data breaches.

  3. Wow, I didn’t even know that cyber liability insurance had become prevalent. I remember thinking a couple of years back that it might be a good idea to be able to protect yourself financially, as cyber crime becomes ever more common. I’m glad to see that it’s taken root, and people can actually benefit from this service. I may have to look into it myself.

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