As business becomes increasingly digital, there are new threats that business owners need to be prepared for. As companies experienced losses and damages due to computer viruses, data breaches, malicious hacking, and other cyber crimes, the industry responded with insurance policies tailored to cover the costs related to these exposures.
What is Cyber Liability Insurance?
Cyber liability insurance is a newer coverage that has evolved from the digitization of business in the 21st century. Cyber liability insurance generally covers your business’ liabilities for a data breach or cyber crimes involving sensitive customer information, such as Social Security numbers, credit card numbers, account numbers, driver’s license numbers, and health records. Coverage is available on a first- or third-party basis. First-party coverage helps cover your expenses when your network or website is hacked or sensitive data is stolen. Examples of covered expenses are setting up a call center for customers after a breach, providing credit card monitoring for affected customers, completing forensic investigation, and covering loses from business interruption. Third-party coverage protects your business in the event a customer, vendor, or partner sues your business for allowing the breach to happen.
Who Needs it?
The short answer – almost everyone. Any business that accepts credit cards as payments, stores any sensitive customer information (financial, health records, or personal), or conducts business online or in the cloud is susceptible to a data breach or cyber attack. According to Property Casualty 360 and Kaspersky Labs, 62% of all cyberattacks are perpetrated against small- and mid-sized businesses with an average breach cost to those businesses of $86,500.
Why is it Important?
Besides the direct costs associated with each breach, there are significant hidden costs to a business that can result from a cyberattack. How significant? According to Deloitte Advisory’s Cyber Risks Services, Forensics & Investigations, and Valuation teams, the hidden costs can account for more than 90% of the total costs! Examples of hidden costs are investigation of the incident, necessary security improvements, customer notification, credit monitoring services for affected clients, regulatory fines, legal fees, litigation costs, and public relations expenses and, most importantly, TIME! After a breach strikes, senior leadership is often left scrambling. If a cyber liability insurance policy is in effect, the company can immediately reach out to the carrier to report the claim and utilize their scale, resources, and specialized claims personnel to save time and mitigate the severity of the loss.
At Univest Insurance, our team of risk consultants have more than 100 years of combined experience in the property and casualty industry. We work closely with cutting-edge cyber liability insurance providers in the market and our consultants can effectively customize a complete insurance portfolio that supports your risk management goals. To have a conversation about what cyber liability coverage may be appropriate for your business, contact us at 800-220-3077 or firstname.lastname@example.org.
Insurance products offered through Univest Insurance, Inc. are obligations of the issuing insurance companies, not obligations or deposits of or guaranteed by any bank and are not insured by the FDIC or any other agency of the United States.