Cyber liability insurance is a relatively new type of business insurance that is designed to protect businesses online. Although the Internet has created a lot of opportunities for businesses and it has made many processes much easier, it has also created a whole new set of challenges.
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The Internet can be dangerous for many people and businesses because there are hackers, viruses, and all types of malware that tries to steal your information, destroy your computer, or breach the security of your network.
The Problem of Cyber Threats
In more recent years, businesses have been targeted online because hackers want to obtain sensitive information such as competitive data or financial information about their customers. Even major corporations have fallen victim to hackers and even their own employees in some cases as they have reported security breaches to their customers on a number of occasions.
Small businesses are not immune either because hackers are also looking at them as potential sources money. Individuals and even people who own any type of website are vulnerable as well. Regular business liability insurance is not enough for businesses that store sensitive information on computers. Hacking has become a pervasive problem in society and businesses must find a way to protect themselves and one of those ways is to purchase cyber liability insurance.
What is Cyber Liability Insurance?
Cyber liability insurance is basically insurance coverage that is designed to provide protection against data breaches, network security, intellectual property, privacy issues, errors and omissions, as well as other any Internet or technology related problem. An insurance underwriter can create a customized policy to create any type of protection necessary for a particular business.
Cyber liability insurance can also cover data breaches related to the physical loss of laptops and other computer equipment when they are stolen by employees or people outside of the corporation. Cyber liability insurance alone provides peace of mind and safety for a business, but this also means that businesses should hire an information technology security specialist to create a security system for the company.
The Costs of a Cyber Attack
All businesses should make sure that they have a firewall, antivirus, antimalware software, and encryption software to help ensure that their information will not be intercepted or stolen. Although it may be quite costly to arrange for a secure network, it is definitely well worth the cost because a cyber attack could cost the company thousands or even millions of dollars in lawsuits, lost earnings, and even reputation. Obviously, there is no absolute way to prevent cyber attacks, but the business should be able to survive the incident if they have insurance coverage and a technologically secure environment.
On average, a small business that is worth around $100,000 would have to pay around $1000-$2000 for cyber liability coverage. Obviously, the costs would increase for larger businesses, but it is not really that much to pay because dealing with an actual security breach can cost tens of thousands of dollars.
Why Do Businesses Need Cyber Liability Insurance?
Businesses and even some individuals for that matter, need cyber liability insurance because they are very vulnerable to attacks, hackers, viruses, security breaches, and intellectual property lawsuits. As aforementioned, hackers are very prevalent online and they frequently target businesses in order to obtain competitive data or sensitive information about customers such as social security numbers and credit card numbers.
Protection From Threats From Within
Hackers are not the only thing out there because sometimes current or former employees will attempt to extort money from the company if they can threaten to release certain information. For example, a disgruntled employee at a bank may have had access to the accounts of thousands of customers and they will demand thousands of dollars or they will divulge the account information online. In addition to that, sometimes employees will inadvertently lose or have hard drives, passwords, access codes, usb drives, or entire laptops stolen and the company will have to pick up the pieces and see if the information has been stolen.
Intellectual Property and Viruses
Viruses can also penetrate an entire network and actually target the customers who use the products or access the website, so the company is responsible if they inadvertently expose or release viruses and malware through their website or products. The Internet has also created very murky territory for intellectual property because there have been many lawsuits against websites because they have posted certain articles, pictures, or videos that were copyrighted by another party.
Cyber liability insurance was created to protect against all of the aforementioned scenarios and also provide the financial means to recover from the incidents as well. With the assistance of an underwriter, the insurance policy can not only cover the cost of the lawsuit, but it can cover the cost of repairing the network, compensating the victims, and even any lost wages or profits that may have resulted from the incident.
Do Most Businesses Already Have This Cyber Liability Insurance?
The sad truth is that roughly 70% of all businesses lack cyber liability insurance, so most of them are very vulnerable to any number of technological issues. None of this is meant to scare people, but cyber liability insurance has really become a necessity and many of the major corporations have this type of coverage.
Cyber Liability Insurance is the Way of the Future
Cyber liability insurance is coverage for technological issues concerning hacking, data breaches, viruses, and any other types of problems that may arise online. An experienced insurance underwriter can create a custom made policy designed to provide coverage for any type of business needs. Although most businesses lack cyber liability insurance, they definitely have a need for it in this day and age.
Don’t let your business suffer if a cyber attack is successful. Compare cyber liability insurance polices today. Enter your zip code to begin!