Over the last several years, cyber liability coverage has evolved from insurance for information technology companies to coverage that nearly every type of business should carry. Many companies are unaware of their cyber liability exposure from retailers, banks, contractors, distributors, restaurants, and medical offices; these all have considerable cyber liability risks.
State laws require companies that have experienced a cyber liability breach to notify all customers that could be affected by the breach that their information has been compromised, even if the data hasn’t been used. In most cases, the notification also requires an option of one-year credit monitoring services and a new card or account number for the customer. These costs can be as much as $250 per individual breach.
It’s understandable that cyber liability insurance makes sense for all businesses. Here’s why:
- Many policies offer “first party” coverage–that is, they will pay you for things like business interruption, the cost of notifying customers of a breach, and even the expense of hiring a public relations firm.
- Is your website and any of your data hosted or stored in the cloud? Take a good look at your contracts: You’re still legally responsible.
Most standard business insurance policies do not cover computer fraud by a third party or the liability arising from a cyber-attack. The good news is solutions are available. Make sure your crime policy has electronic crime and fraud coverage with appropriate limits. Cyber liability insurance should be added to your insurance program to cover the costs associated with customer notification and recovery of hacked data. If you store data, including private information, on computers; use e-mail; generate revenue online; or use your computer to control production, manufacturing, or inventory, your company is at risk!