Some small and midsized business owners may think their companies don’t have anything a cybercriminal would want, but today’s bad actors can use, sell, or ransom your customer information, employee data, intellectual property, internal strategy documents, and more.
Within months of a cyberattack, many small and midsized companies may be forced to shut their doors for good because this crime often results in a significant drain on finances and severe reputational harm. Those that do manage to recover are typically companies that have prepared a cyber incident response plan and secured a comprehensive cyber liability insurance policy.
What does cyber liability insurance cover?
In the aftermath of a cyberattack, your business will be faced with resolving many stressful issues simultaneously—and addressing them usually requires a substantial amount of time and money.
If your company’s computer network or system falls victim to ransomware, malware, phishing, a distributed denial of service (DDoS), or another form of cyberattack, you typically need to take action immediately to mitigate the impact of the crime. The following are just a few of the potential coordination and communication steps:
- Notify anyone impacted by the attack
- Purchase several years of credit-monitoring services for affected customers
- Investigate the source of the breach and fix the vulnerability
- Hire a public relations firm to help restore your company’s reputation
- Get legal representation to help with regulatory obligations
- Determine whether you can pay a ransom to a cyber extortionist who is holding data hostage
The expenditures involved with responding to a cyberattack can quickly add up to a seven-figure sum or more. According to an IBM Security study, companies that had less than 500 employees and were victims of cyberattacks suffered average losses of more than $2.5 million, which would be a crushing financial obligation for many small and midsized businesses.
No matter how cybercriminals attack your business, if you’ve invested in cyber liability insurance, you may get critical financial support to help you pay for the action steps involved in responding and recovering to this event, which includes enlisting the assistance of forensic analysts to scope and contain the incident. The following coverages and services are often included in a cyber liability policy:
- Consequential Reputational Loss
- Cyber Extortion Threat
- Electronic Crime
- Electronic Media Liability
- Employee Privacy Liability
- First-Party Data Protection
- Fraudulent Instruction
- Information Security and Privacy Liability
- Loss of Digital Assets
- Non-Physical Business Interruption and Extra Expense
- Payment Card Industry Fines, Expenses, and Costs
- Privacy Breach Response Services
- Regulatory Defense and Penalties
- Telephone Fraud
- Website Media Content Liability
- And More…
As a commercial cyber liability insurance policyholder, you also typically gain access to a breach event response team and risk mitigation professionals who can help you identify potential cyber threats and, hopefully, avoid them.
What types of businesses need cyber liability insurance?
The traditional rule of thumb has been that if your company takes credit cards or stores sensitive customer or employee data, you should strongly consider a separate cyber liability insurance policy. But with cyberattacks being committed with increasing frequency and severity against businesses of all types and sizes, practically every company is vulnerable to this crime and should secure cyber protection.
Even if you think you have strong security measures in place, today’s cyber criminals are more sophisticated than ever. They are constantly finding new ways to infiltrate your business through your employees, your digital payment systems, your computers and mobile devices, the subcontractors and third parties you work with, your website, and a whole lot more.
The Austin team is here to help protect your business against the growing threat of a cyberattack. Contact us to review your current businessowners policy or other business insurance coverage so we can determine if you have any risky gaps in cyber protection. We want to assist you in making sure your company has considered all of its cyber risks and that you have the best cyber liability solution for your specific exposures.