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September 20, 2016 | Leave a Comment
With the enormous amount of sensitive information stored digitally, companies need to take the proper measures to ensure their data is never compromised.
Every business has an assortment of data of varying value. From sales records to health and medical records, it is the responsibility of business owners to safeguard this information and educate employees to recognize risks online. Failing to do so can result in a data breach, which can ultimately cost the company a significant amount of money as well as jeopardize the operations of the business. The Ponemon Institute found that average annual losses to companies worldwide now exceed $7.7 million – and that number is growing every year.
Hackers and unauthorized individuals have become adept at exploiting weaknesses in a business’ computer system. There are several types of attacks that occur, including:
- Malicious code that can render your website unusable
- Viruses that infect or delete valuable information
- Installed spyware to steal information and passwords
- Phishing emails that may disclose personal information
With all of the data breach exposure a company now has, cyber liability insurance has become just as important has traditional insurance coverage. Although it is a relatively new product in the insurance marketplace, most carriers will offer a limited cyber liability coverage extension. Typically inadequate to meet the exposure needs, we recommend placement with carriers that specialize in the cyber liability space.
These policies are sold under a number of different names and include various coverages. Possible exposures covered by a typical cyber liability policy may include the following:
- Data breaches
- Intellectual property rights
- Damages to a third party system
- Internal system failures
- Cyber extortion
- Notification costs
- Business interruption
As the risk of exposure and the nature of cyber threats have evolved, so have the various policy forms. Contact your Cornerstone representative to evaluate suitable coverage for your firm.
Click here to learn more about mitigating cyber risk.
Written by: Rodney Ragsdale, vice president, The Cornerstone Insurance Group