Today’s online digital world offers convenience, accessibility and speed. It also makes users vulnerable to cyber attacks, such as viruses, data breaches and identity fraud. According to the 2019 NortonLifeLock Cyber Safety Insights Report, roughly one third of the adult population experienced some form of cyber crime in 2019.
Cyber crime affects more than just internet users, however. Business owners need to be aware of their responsibilities when it comes to data breaches, identity theft, viruses and other online risks. Your business has an obligation to protect the personal data and financial information of customers. With digital files being stored online, business transactions being done through email or websites, and companies increasingly relying on virtual communication, the risks of cyber crime come from a variety of sources.
The Target data breach affected 70 million Americans and Canadians and made headlines around the world. The costs to the company responsible for the customer information were significant. Not only did they hire a third party to conduct a thorough forensic investigation, but affected customers also had to be tracked down and notified of the breach. Now the company is offering one year of complimentary credit monitoring to those affected. Those are significant costs for any business to bear, regardless of size.
While larger companies may seem more appealing to criminals due to the volume of data, the majority of cyber criminals target medium to small businesses. They’re considered to be more vulnerable as they may not have the same security precautions in place. In fact, 31% of all cyber crimes were against businesses with less than 250 employees.
Whether you own a large or small business, you may want to consider cyber liability insurance. Cyber liability coverage can protect your business against risks associated with online usage. Your company’s electronic data is not included in typical business liability policies. If you’re concerned about the security of your online assets, contact your local BrokerLink branch to discuss purchasing cyber liability coverage.
There are a number of different policies available, depending on the specifics of your business. For example, a landscaping business would likely have different requirements than an online retailer or financial advisor. Factors like the size and nature of your business, number of customers and the type of data will affect which cyber liability product is right for you.
Most cyber insurance policies cover more than one kind of coverage. Property coverages involve any damages to the data itself and how those damages affect your business. These losses could include costs associated with forensic analysis, repairing and restoring computer systems, data recovery, customer notification, crisis management and hiring a public relations firm to maintain your reputation. To put it simply, they are the costs your business must pay to recover from any cyber attacks or data breaches.
Crime coverage is also included in some cyber insurance policies. Your business’ data is considered to be an asset so it is considered a crime if it is damaged or stolen. This coverage includes any protection against any criminal activity impacting your funds, money or other financial assets from your bank account. It may also cover any forged payments, counterfeit currencies or fraud. One of our brokers even had a customer who filed a very serious claim after his company’s data was stolen. The criminal extorted the business owner, demanding payment in order to have the information returned. Make sure to ask your broker if your business is protected against criminal cyber activities.
Third party liability coverage applies to any damages experienced by someone other than your business. This includes lawsuits filed against you by customers or other parties affected by cyber crime through your business. While policies typically cover the cost of defending you against covered claims, these costs may be limited in the terms of your policy. Third-party coverages may also be subject to a deductible, depending on your policy.
Cyber liability insurance has only been around for ten years and there are many different types, so it may be difficult to figure out what you need. Your BrokerLink broker will help determine what cyber coverage is right for you. We’ll take the time to get to know your business, evaluate the risks and consider all your options. So you can rest easy knowing your business is safe online.
If you’re an owner of an online business, or are interested in launching an e-commerce store, check out what's the best insurance for you. Read more about online business insurance in our insurance for online businesses blog post.