By Technical Development Division
Lately, there seems to be one news story that never goes away: data breaches. They affect retailers, health systems and even the U.S. government. In this day and age, no one is safe from hackers. As a matter of fact, according to a new study conducted by the Ponemon Institute, 43% of companies have experienced a data breach over the past year.
While data breaches are increasing, 27% of companies do not have a response plan or team to deal with such a crisis should it occur. And companies that do have measures in place do not feel confident that they will work. According to the report, only 30% of companies feel their organization is “effective or very effective” at creating these kinds of plans. These statistics make one thing clear: cyber liability insurance is more important than ever.
Traditional insurance policies are not designed to cover the exposures associated with data breaches. Any coverage you might find under a general liability, professional liability or crime or property policy is typically limited or simply accidental. And while some carriers might offer you an endorsement to expand the coverage of your policy, it won’t be nearly as comprehensive as buying a separate cyber liability policy.
Here are areas of exposure covered by a cyber liability policy:
- Information security and privacy liability for failure to protect personal or corporate information held on computers systems, smartphones, laptops, or paper files
- Other costs associated with data breaches, such as public relations and investigative costs
- Loss of business income when a hacker prevents your customers from accessing your website
- Personal injury (such as libel) that may result from the use of blogs on your website or other social media
- Liability for your customers’ business interruption suffered because a hacker prevented their access to your website or systems
Data breaches are not going away anytime soon, but this does not mean you’re defenseless. In addition to taking other precautions, you should work with an insurance expert to secure a cyber liability policy with favorable terms. Doing so will put your company in a position of strength should a data breach occur in the future.
Technical Development Division