According to an annual report from the FBI’s Internet Crime Complaint Center, or IC3, the top targets of hackers are small-to-midsize businesses and the government. For most businesses, the threat of a breach of sensitive data can be a business-ending event.
Cyber liability insurance can be critical for the protection of a business’ financial survival against the overwhelming costs of a data breach. Fines and responsibilities for companies for a data breach violation can reach millions of dollars, regardless of if it was the business’ fault.
Data breach lawsuits, business interruption expenses, ransoms, and regulatory fines and penalties are significant costs that businesses can recover from having cyber liability insurance.
Insurance agents know that policy costs can range widely and are typically based on the policyholder’s level of cyber risk, and the type of sensitive data that they store.
“If you’re a victim of a cyberattack, it’s too late to consider cybersecurity insurance coverage. You really need to rewind. You need to make sure that you have that incident response plan in place first,” Advises Eric Hobbs, CEO of Technology Associates.
“Know what factors are covered by your coverage and which aren’t. Will your policy pay your ransom? Will it pay to get your data back? Will it pay for forensic costs to make sure that the hackers aren’t still in your system? Does it cover loss of business or loss of funds?”
There is a unique opportunity for Insurance Agents and IT Firms to partner at this junction to ensure businesses are advised and covered properly.
Most recently, ransomware attacks have been widely publicized, and awareness of the severity of risk to a business’ operations and finances is at an all-time high. With that said, we should expect to see a direct correlation in requests for cyber liability insurance and advisement on coverage as part of an overall IT strategy.
Businesses should act before it’s too late and partner with an IT firm who can help them create an incident response plan and advise them on the best cyber liability insurance policy. Insurance Agency owners should invest in a strong plan for their business to Protect Your Agency and Policyholders Against a Cyber Attack, as well as work with IT companies to provide their policyholders the most appropriate coverage and set up a plan that will help avoid risk for both the policyholder and the insurance agency. Learn how Training Your Employees on Cybersecurity can Help Protect Your Insurance Agency.