Cyber Liability Insurance

10 reasons to protect your business

1. Your data is one of your most important assets, yet standard property insurance policies do not cover it, so you need Cyber Liability Insurance

A cyber liability insurance policy can offer comprehensive coverage for data restoration and rectification in the event of a loss. This coverage applies regardless of its cause and up to the full policy limits.

Most businesses would agree that data or information is one of their most important assets.

It almost certainly holds a value many times greater than the physical equipment upon which it is stored. Yet most business owners do not realize that a standard property policy would not cover damage to or destruction of this data.

2. Systems are critical to operating your day-to-day business but their downtime is not covered by standard business interruption insurance

All businesses rely on systems to conduct their core business, from electronic point of sales software to hotel room reservation systems. In the event that a hack attack, computer virus or malicious employee brings down these systems, a traditional business interruption policy would not respond. A cyber liability insurance policy can cover loss of profits associated with a systems outage. A ‘non-physical’ peril like a computer virus or denial of service attack can cause this outage.

3. Cyber crime is the fastest growing crime in the world, but most attacks are not covered by standard property or crime insurance policies

New crimes are emerging every day. The Internet exposes your business to the world’s criminals and makes it vulnerable to attacks at any time of the day or night. Phishing scams, identity theft, and telephone hacking are all crimes that traditional insurance policies do not address. Cyber liability insurance can provide comprehensive crime cover for a wide range of electronic perils. These perils are increasingly threatening the financial resources of today’s businesses.

4. Third party data is valuable and you can be held liable if you lose it

We all hold more data than ever before and often this data belongs to our customers and suppliers. Non-disclosure agreements and commercial contracts often contain warranties and indemnities in relation to the security of this data. These can trigger expensive damages claims in the event that you experience a breach. Increasingly, consumers are also seeking legal redress in the event that a business loses their data. The risk is further heightened if you hold any data on US consumers.

5. Retailers face severe penalties if they lose credit card data

Global credit card crime is worth over $7.5 billion, and increasingly this risk transfers to the retailers that lose the data*. Under merchant service agreements, compromised retailers can incur liability for forensic investigation costs, credit card re-issuance costs, and the actual fraud conducted on stolen cards.

These losses can run into hundreds of thousands of dollars for even a small retailer. Cyber liability insurance can help protect against all of these costs.

6. Complying with breach notification laws costs time and money

Many different countries are slowly introducing breach notification laws. These laws generally require businesses that lose sensitive personal data to provide written notification to the individuals potentially affected. Even though a legal obligation to notify only currently exists in some countries, this is changing and there is a growing trend towards voluntary notification in order to protect your brand and reputation. Customers who have had their data compromised expect openness and transparency from the businesses they entrusted it with. Cyber Liability Insurance can provide cover for the costs associated with providing a breach notice even if it is not legally required.

7. Your reputation is your number one asset, so why not Cyber Liability Insure it?

Any business lives and dies by its reputation. Although you can’t insure against certain reputational risks, you can insure your reputation in the event of a security breach. When a security breach compromises your systems, you risk losing the trust of your loyal customers, which can harm your business far more than the immediate financial loss. Cyber Liability Insurance can not only help pay for the costs of engaging a PR firm to help restore this, but also for the loss of future sales that arise as a direct result of customers switching to your competitors.

8. Social media usage is at an all-time high and claims are on the rise

Social media is the fastest growing entertainment channel in the world. People exchange information at lightning speed and expose it to the world. However, businesses often exercise little control over what is said and how it is presented. This can lead to liability for the actions of their employees on sites such as LinkedIn, Twitter, and Facebook. Cyber Liability Insurance can help provide cover for claims arising from leaked information, defamatory statements or copyright infringement.

9. Portable devices increase the risk of a loss or theft

The advent of portable devices and the ability to work away from the office has made life a lot easier for many of us. However, this new style of working also means that people can steal or lose important and confidential data much more easily. A laptop left on a train, an iPad stolen in a restaurant, or a USB stick going missing are all good examples. In addition, cybercriminals are building a growing number of viruses specifically to target the devices themselves. Cyber Liability Insurance can help cover the costs associated with a data breach if someone loses a portable device, if someone steals it, or if it falls victim to a virus.

10. Hackers target not only big businesses, but also numerous small ones

Whilst the large-scale hack attacks on the news often involve big companies, small companies are also at risk and often don’t have the financial resources to get back on track after a hacking attack or other kind of data loss. In fact, hackers aimed over a third of global targeted attacks at businesses with less than 250 employees. Cyber attacks are quickly becoming one of the greatest risks faced by smaller companies, making cyber liability insurance a must. It can help protect smaller companies against the potentially crippling financial effects of a privacy breach or data loss.