Cyber Liability, The Risk That Keeps Growing

Cyber Liability, The Risk That Keeps Growing

According to the FBI, cybercrime is now ranked as the number one law enforcement concern. Your business has a greater chance of having a cyber breach than it does of having a fire. It is important to have the right kind of insurance coverage in order to protect your business.

Welcome To The Next Generation Of Business Loss

Cyber Liability continues to be a major issue for many businesses. In today’s data-driven social media world, businesses of all sizes have had a cyber-attack or data breach. Statistics show that 40% of all cyber incidents affect businesses with fewer than 100 employees. According to Business Insurance, a small business now has a greater chance of a cyber-breach than it does of having a fire.

Cyber Myths and Facts

“If I have a data breach I can just call my customers.”  Myth – New laws now require you to provide written notification and even provide identity theft coverage for a period of time. A data breach could cost you up to $250 per individual breach. The government can also fine you if they feel you have not taken appropriate actions.

“Only large companies need the coverage.”  Myth – Businesses with fewer than 50 employees are the latest targets of cyber thieves. Often small businesses fail to have adequate protection making them an easy target. Companies with less than 75 employees endured 70% of the total attacks.

“Traditional business liability insurance will cover cyber liability.”  Myth – Traditional liability insurance does not cover your business for internet exposure or data breach.

“We don’t use the internet for business and therefore don’t have any exposure.”  Myth –According to the 2013 Data Breach Investigations Report by Verizon, 13% of all data breaches that occurred were caused by an employee or other internal source.

“My company does not store credit card information; therefore I don’t have any risk.”  Myth – Confidential information is defined as any kind of personal information including addresses, email, social security numbers, Federal ID numbers, family member information, bank information and more.

Cyber liability coverage has evolved from insurance for information technology companies, to coverage that nearly every kind of business should have.  All types of businesses including retailers, banks, contractors, distributors, restaurants and medical offices, are often unaware of the severe data breach exposure they face. In short, any business not making an effort to protect personal private information is seriously out of step with the emerging landscape of privacy law.

We will be offering a number of articles on this subject over the next few months including; cyber risk prevention and personal identity theft issues.

Cyber Liability Risk Continues To Evolve

We Keep You Informed On the Latest Risk Issues

Did you know that the average business has a greater chance of having a cyber breach than it does of having a fire? This is true, and your business insurance policy most likely will not cover cyber liability losses.

Technology has enabled the common criminal to get into the world of cybercrime. Small businesses are a prime target, as most small businesses have little or no, protection. Criminals can actually purchase programs that can be set up to hack dozens of businesses at the same time. It is important that your business has the right business insurance, including cyber liability insurance.  

Every state has enacted laws requiring notification to all customers affected by a data breach, whether or not their information has been used maliciously. In most cases, the notification also requires an option of one year of credit monitoring services and a new card or account number for the customer. Costs can be as much as $250 for each individual affected by the breach.

We specialize in cyber liability insurance (also known as Data Breach Coverage). Our experts are ready to extend their services to help you analyze and secure the best possible coverage to fit your firm and protect your company.

Cyber Insurance Coverage Offers Real Solutions

• Cyber liability
• Data restoration coverage
• Business income or lost income
• Legal notification coverage and expense

Claim Examples

A manufacturer received a call and email from someone, whom they thought was their bank, asking for a verification of funds request. The CFO provided the information, and $75,000 was removed from their account. The cyber thief was able to take $75,000 from the manufacturer.

A restaurant had 200 credit card records stolen. The hacker was able to charge $120,000 from the credit cards. The restaurant incurred notification costs and direct damage costs of over $250,000.

An employee of a healthcare provider lost a laptop while traveling. The laptop contained names, addresses, birth dates, and social security numbers for 150 patients. The company paid for one year of credit report monitoring to affected patients to mitigate future issues. The total cost was $25,000.

Why Work With Our Insurance Agency?

• We know and understand your industry.
• We are a full-service independent insurance agency.
• Our goal is to provide the best possible combination of coverage, price, and service.

Top Business Insurance Risks

Top Business Insurance Risks

According to insurance experts, here are the top five business risks:

The Allianz Risk Barometer surveyed more than 500 risk managers and corporate insurance experts in 47 countries, to identify the primary challenges facing businesses this year.¹ 

While these are responses from large corporations, we take away many applications for medium and small businesses. Here are some of the risk issues for 2015.

1. Natural Disasters – These issues are always a concern for small and medium business. We can offer flood, earthquake and wind insurance as your needs arise.
2. Cyber Liability– Cyber liability and data theft is one of the hottest topics for businesses, risk managers and insurance companies. 2014 had some of the biggest data thefts that we have seen. But even more interesting, is that small businesses are exposed more than large businesses. In fact, 25% of data breaches affect businesses with less than 50 employees. A small business has a greater chance of having a cyber breach than it does of having a fire.
3. Government mandates and regulations – There continues to be increased oversight from government in healthcare and financial reporting that creates new risk and liability for businesses.
4. Political and Civil Issues – As seen in 2017, political and civil issues have a direct impact on many small businesses. Having the right kind of business insurance is important to protect your business in the event of civil riots.
5. Business Interruption – If your business has a loss and you are unable to operate for a period of time, you will need financial resources in order to get back in operation. You may even need to continue payroll for a period of time. Business interruption insurance can provide these resources.

This information is intended for the client, individual or entity to which it is addressed. These articles contain concepts and opinions, and are not intended to represent the consensus of the insurance or risk community, nor to provide professional legal or tax advice. Please seek professional legal or tax counsel before making any decisions. The information provided does not change or modify any insurance policy, only the actual terms of the in-force policies will govern claim settlements.