It's pretty safe to say, every business has a computer these days. In fact, it's almost safe to say every employee at every company has a computer. Computer networks are part and parcel of running a business. And these days they're more sophisticated than ever - with hybrid on-premise and cloud applications, remote access, mobile devices, always-on connectivity - the security failure points are almost infinite. This is the landscape we work in when we're managing and securing our clients' networks. So, how does Cyber Liability Insurance fit into this discussion?
What Cyber Insurance Isn't?
Cyber Liability Insurance isn't something that you can purchase with the goal of preventing a breach or security incident from happening. It's also not anything that will pay for the cost of getting your network "secure" after an incident happens.
What is Cyber Liability Insurance?
A robust cyber liability insurance policy can help a business weather the storm when a data breach or network security failure has happened. Cyber liability insurance can be obtained with relative ease these days. What's unique about most cyber liability insurance coverage is that it usually covers both first-party and third-party expenses.
First-party expenses include:
- the costs of notifying customers of the breach
- crisis management and PR costs related to mitigating reputational damage
- business interruption costs
- costs associated with hiring a forensics company to investigate the breach
- the cost of offering credit monitoring to customers as a result of the breach
Third-party expenses include:
- claims expense and damages
- legal defense costs
- regulatory defense costs
That said, you should be aware of some of the potential limitations of coverage including:
- if your vendor's systems are breached, your customers still have exposure, but you may not have coverage
- cyber liability insurance may NOT cover you for both electronic data breaches and the information stolen from out of your trash
- debit/credit card fraud is rarely covered
- regulatory penalties may not be covered
Why You Need It!
These days hacks, breaches, and cyber theft seem so common place that it seems it's inevitable that a business you know is going to be hit. So, the question isn't what's the risk, but rather how prepared do you want to be for when it happens? Only you would know this for sure. But, the combination of your IT Service Provider, insurance agent, and your CPA would certainly be a great triumvirate to start with for getting input on your decision.
We have experience working with our clients to help assist with the decision ("Do we need it?) as well as completing the technical survey to get it. If you'd like to learn more about cyber liability insurance or need any assistance in this area, please feel free to give us a call.
What do you think? Has this info been helpful? Let us know in the Comment box below or shoot me an email if you’d like to chat about this in more detail.