As we all rely on electronic communication, our risks increase. Your personal information can be taken, and you may have identity theft.   In many cases, you may not suffer a substantial loss.  But you could, and many do. You may have personal protection in your home insurance for that. But what about the business whose information is taken?  They have legal obligations after a breach is discovered.

Cyber Threats are everywhere these days.

If you’re thinking hackers only go after large businesses – most recently Equifax, Yahoo and Target  – think again.  Small businesses – nonprofits included – can no longer ignore the pressing need to protect against cyber threats.  Many small business owners do not realize that small businesses are just as at risk for cyberattacks as larger companies, but they are. According to a report by Keeper Security and the Ponemon Institute, 50 percent of small businesses have been breached in the past 12 months.Let’s face it: hackers will find the weakest link. If they conclude that the big guys have tightened up, they’re just going to go after easier targets, like small businesses.  Hackers aren’t your only concern.  While hackers make the headlines, almost half of data breach incidents as reported by the Ponemon Institute result from “insider negligence.”

Insurance that protects the business in case of a cyber attack may seem like something only large corporations would ever need, or could ever afford.  However, increased legislation and government regulation of cyber security places the burden on companies of all sizes to safeguard the online information provided by customers and clients.  Not only are businesses expected to protect against a data breach, but they are also obligated to respond to an actual data breach.  Would you know how to identify and then notify customers or clients of a breach?  Notification is complicated, regulated by the state in which the customer, client or patient resides.   How would you pay for the short-term crisis and the long-term consequences?  Or the possible lawsuits, regulatory fines or penalties you might incur because of a data breach?

Many states require companies to notify all of their customers if a breach is even suspected and to take necessary steps to correct the situation – a cost estimated at up to $30 or more per customer.  Multiply these costs times your company’s total number of customers, and you’ll see how they can quickly add up.

More than you think!  The coverage is evolving along with the changing tides of technology. Here are just a few examples of the types of coverages that are available:

Security and privacy liability insurance covers third-party claims arising from a failure of the insured’s network security or a failure to protect data. Insurance also responds to regulatory actions in connection with a security failure, privacy breach, or the failure to disclose a security failure or privacy breach.

Event management insurance responds to a security failure or privacy breach by paying costs of notifications, public relations, and other services to assist in managing and mitigating a cyber incident. Forensic investigations, legal consultations, and identity monitoring costs for victims of a breach are all included.

Network business interruption responds to a material interruption of an insured’s business operations caused by a network security failure by reimbursing for resulting lost income and operating expenses.

Cyber extortion insurance responds to the threat of intentional security attacks against a company by an outsider attempting to extort money, securities, or other valuables. This includes monies paid to end the threat and the cost of an investigation to determine the cause of the threat.

Source:  AIG and Business News Daily

Can I afford Cyber Liability Insurance?

Cyber liability insurance can mean the difference between staying in business or shutting your doors after an attack.  Give MAGIS Insurance Group, industry leaders in cyber liability consulting, a call to review your specific concerns.  Can you afford not to?