Cyber Insurance Quotes
Call Us: 954-368-9300

Cyber Insurance / Data Breach Insurance

Introduction

Like death and taxes, cyber attacks are now a fact of life. How can businesses manage the risks related to a cyber attack and reduce the huge costs associated with a cyber attack? One option is insurance.

Cyber insurance has been available for over 10 years, but most businesses don’t know about it. Given that 47 of the 50 states in the US have mandatory data breach notification laws that can result in significant expenses, cyber insurance is an invaluable tool in not only reducing costs but also having a highly skilled team of experts ready to help in responding to a data breach.

Meeting all the costs can drain the finances of a company, especially if it is a small business. Large corporations may be able to meet such costs without draining their coffers. When a data breach occurs, a company has to notify the affected parties, go on a public relations blitz, and meet legal as well as liability expenditures. This is a lot to ask of any company, irrespective of size, financial resources and personnel available to it. Taking insurance means that the company will find an effective method of reducing some of the burden it carries.

It is important for all businesses and organizations to review their current insurance policies to ensure they’re covered for data breach claims. Especially since a (CGL) “Commercial General Liability” insurance policy, often the foundation of an organization’s insurance program, is not equipped nor is it intended to defend or indemnify an organization against the lawsuits and potential liabilities that arise from a cyber attack.

What is cyber insurance?

Cyber insurance, with data breach response services, offers businesses a comprehensive standalone incident response plan solution for assisting in a cyber attack. It may offer coverages such as (depending on the specific policies and endorsements):

  • crisis management and customer notification expenses
  • credit/identity theft monitoring
  • privacy and security liability
  • privacy regulatory defense and penalties
  • computer forensics investigation
  • cyber extortion (ransom)
  • network interruption
  • data loss and reconstruction
  • “Data Breach Coach” (aka “Privacy” attorney)
  • pre-breach planning services

How to buy cyber insurance

For many insurance brokers, the technicalities of information security and the details of how to deal with a data breach are still a mystery. Getting the right broker is important. A good specialist broker will save you time in determining what is right for your business, remembering that this may not be the broker you are currently using for your non-cyber risks. A broker that understands your technology infrastructure can help you navigate through the many cyber insurance options, endorsements, terms, definitions and exclusions that match your needs. Selecting the right policy for your business, business model, industry, size, exposures and so forth is a very complex exercise, which is why a specialist broker is important, as they are likely to know the best products from the right insurance company that suit your needs.

No two businesses are the same when it comes to cyber risks, therefore it is key to understand the cyber risks your business faces and to ensure your cyber policy is tailored to mirror those risks. With the right cyber insurance policy, many breached businesses will have an alternative to bankruptcy when they pull their policy out of their top drawer. No two businesses are the same when it comes to cyber risks, therefore it is key to understand the cyber risks your business faces and to ensure your cyber policy is tailored to those risks.

Why Cyber Insurance?

Large corporations aren’t the only businesses that need cyber insurance. Small businesses are also at high risk for a cyber attack. Consider these stats:

  • Small businesses experienced a 300 percent increase in cyber attacks from 2011 to 2012.[i]
  • The largest growth area for targeted attacks in 2012 was small businesses—or companies with fewer than 250 employees.[ii]
  • Of all cyber attacks in 2012, 31 percent targeted small businesses.[iii]
  • In 2011, nearly three-quarters of data breaches involved businesses with 100 employees or less.[iv]
  • The cost-per-compromised record in 2011 was $194.[v]

4 Reasons Why Cyber Insurance Is a Must

More than ever, businesses need cyber insurance because:

  1. Small businesses are especially vulnerable—The risks to businesses that don’t carry cyber insurance are real. And a small business does not have the financial or technology resources to effectively protect against and survive a data breach.  The financial costs alone can destroy a small business trying to survive a cyber attack. Namely, a data breach requires investigation services to find the source of the breach, notification of customers, litigation fees, monitoring credit, and it leads to significant lost business.
  2. Health care-related businesses need its protection—Businesses in the health care field are uniquely vulnerable to and must deal with cyber risk. New HIPAA laws require that businesses create the appropriate data breach procedures and hold trainings, assess and mitigate risk, conduct audits and comply with procedures when a breach occurs. Failing to adhere to these laws leads to hefty fines, and an incident has the potential to significantly affect a business’s reputation.
  3. Data Breach Insurance / Cyber insurance mitigates risk—A cyber insurance / data breach insurance expert can help you manage cyber liability to mitigate the risks to your organization by evaluating your organization’s existing exposure and choosing a cyber insurance policy that covers personnel data, laptops and computer equipment, outsourced data hosting, and more.
  4. Cyber liability insurance is a response team—Most organizations generally don’t have the financial or technology resources to put a response team together to address data breaches. In this way, cyber risk insurance is unlike other insurance policies. When you purchase a cyber liability policy, you essentially get a team of experts at-the-ready to prepare for and respond to a data breach. A reputable cyber insurance expert first acts as your trusted advisor, assessing your business’ risk and unique needs. If a data breach occurs, an insured company’s policy triggers the response team, so you can find the source of the breach quickly and respond appropriately—along with having the financial protection that’s critical to your business’ survival.

Benefits

Small and medium businesses, as well as those in the health care industry, benefit from investing in a cyber risk insurance policy, which can include these services:

  • Mitigation
    • Pre-breach preparation
    • Regulatory and information technology consulting
  • Post-Breach Services
    • Data breach forensic services
    • Consumer notification assistance
    • Media relations consulting
  • 1st Party Coverages
    • Notification expenses
    • Public relations expenses
    • Legal review
    • Forensics
    • Good faith advertising
  • 3rd Party Coverages
    • Defense
    • Liability
    • Data breach related civil awards, settlements and judgments

 


[i]http://www.inc.com/magazine/201312/john-brandon/hackers-target-small-business.html
[ii]http://www.symantec.com/security_response/publications/threatreport.jsp
[iii]http://www.symantec.com/content/en/us/enterprise/other_resources/b-istr_appendices_v18_2012_221284438.en-us.pdf
[iv]http://www.verizonenterprise.com/resources/reports/rp_data-breach-investigations-report-2012-ebk_en_xg.pdf

[v]http://www.ponemon.org/library/2011-cost-of-data-breach-united-states?s=2011

About DataSurer

Storing sensitive data about your employees, customers and financial transactions on your organization’s servers poses unique risks for your business. A single data breach can effectively destroy the brand you’ve spent years building. Trust the experts at DataSurer with your cyber liability needs.

Our technology-insurance experts are leading the industry in best practices. Small and medium businesses, medical, financial, governmental and other organizations realize the risk cyber attacks have for their organizations and the need for effective guidance to purchase the right coverage, and they are turning to DataSurer.

Contact

DataSurer

8360 W Oakland Park Blvd, Suite 201B
Sunrise, FL 33351

Phone: (954) 368-9300
Fax: (954) 368-9301

info@datasurer.com

Locations for DataSurer LLC

    Connect / Follow Us