All Businesses Have Cyber Risk

November 15, 2017

What would you do if a cyber-security breach happened at your business and your network, computers and phones were unusable for a significant period of time?

What if someone got unauthorized access to your employee’s personal health information from your company’s database?

What if a stolen laptop or mobile device led to sensitive data from your organization, customers or vendors being held hostage by hackers?

This happens every day to organizations of all sizes and levels of sophistication.

Cyber Liability Insurance is a critical risk transfer strategy for protecting your company’s balance sheet in the event of a data breach. Some common breach scenarios for organizations of all sizes are when a laptop is lost or stolen, or when you accidentally click on the wrong link and your network is held for ransom. Cyber Insurance can also serve as part of your organization’s strategic breach response plan as your insurance carrier can help take the lead in navigating the confusing world of investigations, state regulatory requirements and reputational concerns through the breach response services offered by many insurance carriers.

Cyber Liability Insurance has two basic components:

Third-party coverage is provided for Privacy Liability, Security Liability and Regulatory Liability for claims brought against your organizations by a third party.
First party coverage is provided for direct expenses incurred by your organizations a result of Breach Event Costs and Cyber Extortion Costs (including ransom payments).

Business Interruption coverage from security or system failure may be added to some cyber programs. Many cyber policies are modular – meaning, various coverages can be purchased or not – and various limit and deductible structures are available.

Cyber Liability insurance policies Thomas McGee suggests offer the following services as an added benefit to their policyholders:

Breach coaching services
Pre-loss or pre-breach training and mitigation services
Forensic investigation (to help determine the source, location and culprit of the breach)
Legal assistance
Reputational damage control/ public relations
Credit monitoring services
Identity theft fraud resolution services