A CYBER ATTACK? NOT MY BUSINESS!

By: Michelle Roark

Did you know that a cyber attack affects 556 million victims a year?  That’s 18 victims per second and 1.5 million victims per day. 1

Your clients’ information can be stolen in minutes when a hacker gains access to your network or a network that supports your business. Although large corporate breeches make the news, 62% of cyber attack victims are small to mid-sized businesses.2 Often, despite company IT precautions, a hacker gains access to your information when employees unknowingly open phishing emails, use common passwords or mishandle client information (ex: not shredding documents/leaving information on their desks, etc).

The costs associated with a data breach are significant. The 2016 Ponemon Cost of Data Breach Study found the average total cost of a breach to be $4 million and the average cost per affected record to be $158.

A standard Business Owners or General Liability policy does not include coverage for a data breach or cyber attack. The best way to protect your clients and your business is by having a Cyber Liability policy. Cyber Liability coverage is a custom policy that includes first and third party coverages and is customized for each business based on their operations and exposures.  First-party coverage applies to the loss of or damage to your own data that is caused during the data breach. The most common first party coverages are notification costs; the expenses to notify your clients that you have experienced a breach.  Third-party coverage involves your liability to your clients or the government and regulatory entities.  The most common third party coverages are the damages paid to a third party because of a breach.

First Party Loss Examples:

  • Computer forensic investigation
  • Crisis management
  • Breach notification
  • Credit monitoring
  • Identity theft remediation
  • Public relations
  • Data ransom and cyber extortion
  • Business interruption and income

Third Part Loss Examples:

  • Legal fees to defend you in a law suit
  • Regulatory fines and penalties
  • Unauthorized access
  • Intellectual property loss

The inevitability is that it’s not if you will have a data breach, but when. To protect your clients and the reputation of your business, call me at 410-377-2111 for a Cyber Liability risk assessment.  

1 http://www.go-gulf.com/blog/cyber-crime/
2http://www.propertycasualty360.com/2015/05/27/small-mid-sized-businesses-hit-by-62-of-all-cyber?slreturn=1478883901