What is cyber insurance? Does my business need cyber insurance? These are questions we hear quite frequently. Since today is National Data Privacy Day, we thought it would be a great time to share some information on the importance of cyber insurance for small businesses.
The National Cyber Security Alliance (NCSA) spearheads the Data Privacy Day campaign with the goal of educating consumers on how to own their online presence and keep their private information secure. Here at RSS, we know how hard you work to run a successful business, and we want to play a part in making sure nothing stands in the way of your success. How can we help you keep your business safe? Cyber insurance.
Cyber insurance is crucial in helping your company recover after a data breach, with costs that can include business disruption, revenue loss, equipment damages, legal fees, public relations expenses, forensic analysis and costs associated with legally mandated notifications. Following are some ways that cyber insurance can provide coverage:
- Lost Data
Companies are responsible for their online data, no matter where it is stored. Whether it is stored on your property, in an offsite data warehouse or in a third-party technology company cloud, you may be held liable if any personally identifiable information (PII) or protected health information (PHI) gets exposed. To help protect your company’s data, cyber professionals recommend you understand where all your private or confidential information is stored. Create and test policies and procedures concerning the collection and storage of data, and have a document retention procedure in place to ensure you avoid keeping data you do not need. If a breach does occur, a cyber policy can cover breach notifications and remediation expenses, subject to the applicable retention. It also can cover defense expenses such as responding to and cooperating with regulatory investigators.
- Lost Devices
Today’s mobile workforce means that laptops and other mobile devices often leave the workplace premises and may be stolen or compromised, potentially exposing private or confidential data. While you cannot completely prevent theft or loss, your organization can take steps to protect and limit the amount of data on each device, such as implementing procedures for using effective passwords and mandating periodic changes. Avoid storing any private or confidential data on laptops. Or, if necessary, store only encrypted data or access it via a secure connection to a server. If a breach does occur, a cyber policy can include Network and Information Security Liability coverage, which provides protection for failure to prevent unauthorized access to, or use of, data containing private or confidential information of others. The costs for a single lost laptop can include more than just the cost of the device, such as legal costs, investigation and miscellaneous expense.
- Notification Requirements Notifying customers of a breach and other post-breach responses is mandated by law and can come at a devastating cost. As part of a cyber policy, the carrier would refer the customer to a law firm to serve as counsel and breach coach and help reimburse those costs, subject to the applicable retention. An incident breach response vendor would also be recommended to handle customer notifications, in keeping with state laws when personal information is compromised.
Computer forensics teams can determine the extent of a breach and whether private customer information may have been compromised. Some cyber policies will reimburse the insured, subject to applicable retention, for computer forensic experts. The policy also could provide coverage for potential business loss and extra expenses that may occur during the period of business restoration. Cyber liability policy customers have access to risk management services, cyber security experts and other resources to help prevent a data breach. Having cyber insurance can help prepare your company to respond effectively in the critical hours and days following a data breach.
Most businesses today rely on technology to operate, which means cyber insurance is more crucial now than ever. Don’t let your business be affected by a devastating data breach. Please contact our office to learn more about a cyber liability policy or to learn how you can further protect your business from financial ruin through a well-placed insurance program.
Source: *Ponemon Institute 2016 Cost of Data Breach Study and Travelers Insurance