Cyber Liability – Are you Insured?
Cyber protection is of the utmost importance these days with cyber breaches occurring so frequently. So much is being stored online that the thought of a cyber breach taking place could be detrimental to a company.
These attacks are no longer just affecting large businesses, but smaller businesses as well, which is why everyone needs to seriously consider being protected. Business and standard property insurance does not cover your most important assets, but cyber liability insurance does. A data breach in a company who does not have insurance can strongly impact them in a negative way, and the thought of trying to recover can be a nightmare, not to mention extremely expensive.
If a hacker were to get into a database, not only is confidential business material being stolen, but personal employee and customer information as well. This can result in millions of dollars being taken from the business itself as well as the client database. There are severe penalties for losing credit card data which means your company will be responsible for the forensic investigations that will have to take place and end up costing thousands of dollars. All of the expenses that are involved in the recovery process can be endless and they include business interruption, security updates, customer concerns, and bankruptcy. If a business invests in a reputable cyber liability plan, it can dramatically help cover the costs of an attack which include loss of profit, customer reimbursement, and security overhauls.
There are breach notification laws set up in the U.S. that state all parties involved in the breach need to be notified in written form when the breach occurs. Therefore, in order to comply with these regulations, there will need to be a whole lot of time dedicated to getting the company back on its feet. Another aspect of a security breach is how the reputation of a company will drastically change and losing the trust of your customers will be something very difficult to get back, if ever. Let’s face it; losing the trust of your customers may be more detrimental than the financial cost.
Withum’s cybersecurity services,
contact our experts now.
When deciding on cyber insurance, it’s imperative that all instruments be covered in the protection plan such as cell phones, laptops, etc. It is very easy for a hacker to come across a mobile device and take a company down that way, with viruses being developed to strictly attack mobile devices. Cyber insurance will cover all of these virus filled devices and a company can work directly with the insurance provider to create the proper package. This will integrate cyber liability insurance with regular business insurance to ensure the business is fully protected. Lastly, the insurance company can make sure that a firewall is in place to protect the network and choose specific social media policies that reduce the risk of a breach. Large corporations tend to have risk management budgets built-in, but the smaller companies tend not too, so this makes it so important to be fully protected with cyber liability coverage. This kind of insurance has been around for nearly ten years but is very rarely purchased but in the world we live in today, it is an absolute necessity for all businesses so that they can avoid financial and moral disaster.
All that being said, there are some things about cyber insurance that you should be wary about. If you already have cyber insurance or are thinking of getting it, consider carefully before you get that policy and well before an impact, whether the cyber incident response team and legal support team actually represent you or the insurer. Learn more on what you need to know in our latest post.
To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.