In today’s digital world, businesses rely on technology, social media, and business transactions over the internet to run effectively. Businesses that do not use digital resources find it nearly impossible to function. Employees working at home are especially dependent on online platforms for daily tasks.
One issue for businesses using the internet is that being online makes them more susceptible to cyber attacks.
Cyber Attacks Are A Serious Problem
The economic cost of cyber crime is high: A study from a recent report found that malicious cyber behavior cost the U.S. economy between $57 billion and $109 billion every year—and that’s just for businesses. Individual users who have their passwords compromised, or experience downtime due to a DDoS attack can also face fines, lawsuits, or both.
Cyber Liability Insurance: What Is It?
In a nutshell, cyber liability insurance is a means for businesses to have their financial loss risk lower when a security breach happens. Also known as cyber liability insurance coverage (CLIC) or cyber risk insurance, it’s meant for organizations to be able to deal with risk exposure through offsetting costs that come with recovery after events like cyber-related security.
Cyber liability insurance originally came from E&O insurance. Cyber insurance became increasingly popular in 2005. Today, roughly one-third of companies in the United States buy cyber liability insurance for themselves.
Cyber Liability Insurance: What Does It Protect Against?
Sharing and storing sensitive data have become commonplace in today’s business environment. Noncompliance can be costly. Either way, cyber insurance is a business continuity policy to aid in the event of a loss or lawsuit. Some of the costs that cyber liability insurance covers include:
- Costs of assisting your clients after a breach
- Costs of business downtime
- Costs of investigating the incident
- Costs of notifying your clients of the breach
- Costs of restoring your compromised data
- Cyber insurance typically covers expenses related to first parties as well as claims by
Cyber Liability Insurance Will Cover A Data Breach
If your retail store stores credit card information, it’s critical to purchase cyber liability insurance, which can help you protect against the costs associated with cyberattacks. A single data breach can be rather devastating for your business.
The coverage of the policy relates to:
- Cyber incidents that disrupt business
- Cyberattacks
- Data breaches
- DDoS (denial of service) attacks
- Malware
- Phishing
- Ransomware
In order to recover from cyber threats that cause their customers’ personal data to be exposed, retailers usually need first-party cyber liability coverage. This will come in particularly handy when it comes to cyber extortion payments, providing credit monitoring services, notifying customers affected by a data breach, business interruptions because of cyber crime, and other recovery activities.
Conclusion
Cyber liability insurance is well worth considering as a way to protect your small business from losses. Costs that are covered include business downtime, restoring compromised data and notifying customers of the attack. A good rule of thumb for retailers is to get first-party cyber liability coverage. That way, things can run smoothly even in the unfortunate aftermath of a cyber attack.
Do you need cyber liability insurance in NYC? Reach out to Jeff Bernard today! We offer comprehensive policies in several areas, including personal liability, homeowners’, and term life insurances.