Following recent media coverage, in particular the TalkTalk cyber-attack, we wanted to make sure you are aware that traditional insurance policies do not always protect you from cyber liability losses. Therefore, to ensure your business is protected, you may wish to think about Cyber Liability Insurance. Here we look at 10 reasons why this insurance should be considered:
- Data is one of your most important assets. It is almost certainly worth many times more than the physical equipment that it is stored upon. A cyber policy can provide comprehensive cover for data restoration and rectification in the event of a loss no matter how it was caused and up to the full policy limits.
- Systems are critical to operating your day to day business, but their downtime is not covered by standard business interruption insurance. In the event that a hack attack, computer virus or malicious employee brings down these systems, a traditional business interruption policy would not respond. Cyber insurance can provide cover for loss of profits associated with a systems outage that is caused by a “non physical” peril like a computer virus or denial of service attack.
- Cyber crime is the fastest growing crime in the world. Phishing scams, identity theft, and telephone hacking are all crimes that traditional insurance policies do not address.
- Third party data is valuable and you can be held liable if you lose it. Non-disclosure agreements and commercial contracts often contain warranties and indemnities in relation to the security of this data that can trigger expensive damages claims in the event that you experience a breach. Increasingly, consumers are also seeking legal redress in the event that a business loses their data.
- Retailers face severe penalties if they lose credit card data. Under merchant service agreements, compromised retailers can be held liable for forensic investigation costs, credit care re-issuance costs and the actual fraud conducted on stolen cards.
- Complying with breach notification laws costs time and money. These generally require businesses that lose sensitive personal data to provide written notification to those individuals that were potentially affected. Cyber policies can provide cover for the costs associated with providing a breach notice even if it is not legally required.
- Your reputation is your number one asset, so why not insure it? Cyber insurance can not only help pay for the costs of engaging a PR firm to help restore your reputation following a breach, but also for the loss of future sales that arise as a direct result of the breach.
- Social media usage is at an all-time high and claims are on the rise. Information is exchanged at lightning speed and exposed to the world. Often there is little control exercised over what is said and how it is presented. Cyber insurance can help provide cover for claims arising from leaked information, defamatory statements or copyright infringement.
- Portable devices increase the risk of theft. A laptop left on a train, an iPad stolen in a restaurant, a USB stick going missing are all good examples. In addition, the devices themselves are being targeted with a growing number of viruses being built just for them. Cyber insurance can help cover the costs associated with a data breach should a portable device be lost, stolen or fall victim to a virus.
- It is not just big businesses being targeted by hackers. Cyber attacks are quickly becoming one of the greatest risks faced by smaller companies.
For further information about Cyber Liability Insurance please contact:
- Lee Manning, Raffingers, email@example.com, or
- Warren Baldwin, Berns Brett Ltd, Warren.Baldwin@bernsbrett.com