Do you need cyber insurance?Do You Need Cyber Insurance?

 

Statistics

Reports from 2014, have shown that upwards to 70% of companies surveyed have reported being hacked once this year. Likewise,18% of these businesses have stated that they have experienced two to a half dozen cyber attacks. While 12% of those companies reporting, have had to fend off as many as fifteen invasions from cyber-space.

What You Can Do

The statistic above give some feel for why you might need cyber insurance. However, there are things you can do on your own to improve your cyber security. “According to a recent white paper released by Business Insurance, when assessing your own cyber security, watch for these frequent weak spots:

  • Poor encryption standards for databases or computers (particularly laptops)
  • Failure to utilize detection software
  • Unsatisfactory patch management (including implementation of necessary code to vulnerable systems) or failure to secure servers
  • Inadequate oversight of vendors or third-party providers
  • Lack of organization incident response plan
  • Insufficient website vulnerability testing

Coverage

You can expect to be covered by the following things by cyber insurance:

  1. Data Destruction-if someone willfully destroys your data.
  2. Extortion/Theft-if someone tries to force you to give up data or steals it from you.
  3. Hacking-if someone hacks into your data and steals it.
  4. Interruption of Service- if someone interrupts your service, so your legitimate users cannot access it.
  5. Liability Coverage-You are covered against suits by others.
  6. Failure to Safeguard-if someone else’s data is lost because of your negligence.
  7. Data Defamation-if you defame someone through the use of your data.
  8. Security Audits-Your system will be routinely reviewed to make sure it is secure.
  9. Public Relation-if your company name is damaged by a cyber attack. Your insurer will help repair your business image.
  10. Investigation Expenses-your insurance will help pay to find who cyber attacked your company.
  11. Your insurer may offer a reward to find the culprit.

Does Your Company Need It

In a recent article by NIP Specialty Brokerage, it was stated:

“Most companies don’t feel they need to be concerned about cyber liability, but in reality, any entity that houses or exchanges electronic data, any company with a website, and any organization that conducts business online is susceptible to the devastation that comes from cyber crime. If it results in the theft or loss of sensitive data, the costs can be staggering.”

Advantages

As a small to medium size company, you would have lower premiums because you would be seen as a lower risk. Having cyber insurance would complete your liability portfolio with your roofing insurance you have workers’ compensation, which protects you from claims by your workers; general liability, which protects you from claims from your clients. Finally, a serious data breach could wipe out a business your size that was without cyber insurance.