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cyber liability & data breach

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Virtually every organization faces data and cyber risk especially those that rely on technology to do business.. With so many connected devices, data and cyber risk is an exposure that modern businesses cannot escape. When cyber attacks like data breaches and hacks occur, they can result in devastating damage.

We believe knowledge is power, and have created the guide below to help bridge the gap between the “lawyer language” in your insurance contract, and the every-day business owner. Read on to learn more, or start a quote if you prefer expert assistance.

This Cyber insurance guide will help you:

Cyber liability insurance and data breach insurance are terms often used interchangeably, but they actually cover different aspects of risk. Cyber liability insurance generally provides coverage for various liabilities and expenses arising from cyber incidents, such as third-party claims for data breaches, privacy violations, or network security failures. It focuses on the legal and financial consequences of cyber events.

On the other hand, data breach insurance specifically focuses on the costs associated with a data breach incident. It typically covers expenses related to notification and credit monitoring for affected individuals, public relations efforts, legal assistance, and potential regulatory fines. Data breach insurance helps businesses mitigate the financial impact of a data breach and navigate the necessary response and recovery steps.

In summary, while cyber liability insurance offers broader coverage for cyber-related liabilities, data breach insurance hones in on the specific costs associated with a data breach incident. Both types of insurance can be essential components of a comprehensive risk management strategy in today’s digital landscape.

A ransomware attack on your business can cause a lot more damage than simply paying the ransom itself. The attack ripples through your business and includes pauses to operations, reputational harm, a potential data breach, system rebuilding, and much more.

According to a study done by IBM, the average cost of a cyber attack in 2022 equals $9.44M. Their study also projects that 83% of businesses will face a cyber attack at some point, so it’s not a matter of “if”  rather, when.

The risk of not carrying cyber insurance is substantial. Without proper coverage, your business may bear the full financial burden of the aftermath of a cyber attack. The costs associated with managing and recovering from a cyber incident can be astronomical, including forensic investigations, legal fees, public relations efforts, customer notification, credit monitoring, and potential regulatory fines. Additionally, the reputational damage and loss of customer trust resulting from a data breach or cyber attack can have long-lasting consequences for your business.

Cyber insurance provides a safety net, offering financial protection and assistance in managing the fallout of a cyber incident. It can help cover the expenses associated with breach response, legal defense, notification, credit monitoring, and other critical services. By carrying cyber insurance, you can transfer some of the financial risks and ensure that your business has the necessary resources to navigate the challenges posed by cyber threats and data breaches.

Cyber insurance policies typically cover a wide range of events and expenses related to cyber incidents. While coverage may vary among insurance providers, here are some common events that cyber insurance policies may cover:

  1. Data Breaches: The costs associated with responding to a data breach, such as forensic investigations, legal counsel, notification to affected individuals, credit monitoring services, and public relations efforts.

  2. Cyber Extortion and Ransomware: Expenses related to ransomware attacks, including ransom payments, negotiations with cybercriminals, and the costs of restoring systems and data.

  3. Business Interruption: Loss of income and additional expenses incurred due to a cyber incident that disrupts your business operations.

  4. Privacy Breach:  Unauthorized disclosure or misuse of personal information, including claims for invasion of privacy, defamation, or negligence.

  5. Network Security: Failure to adequately secure your computer systems, resulting in unauthorized access, data theft, or other cyber-related damages.

  6. Media Use: Intellectual property infringement, defamation, or slander arising from content published on your website or social media platforms.

It’s important to review the specific terms and conditions of your cyber insurance policy to understand the scope of coverage and any limitations or exclusions that may apply. Consulting with an insurance professional specializing in cyber insurance can help you assess your coverage needs and find a policy that adequately protects your business from a wide range of cyber risks.

Here are some simplified preventive measures to help protect your business from cyber attacks:

  1. Train Your Employees: Teach your staff about cybersecurity basics, like creating strong passwords, spotting phishing emails, and avoiding suspicious websites or downloads.

  2. Use Reliable Security Software: Install and update firewall and antivirus software to detect and block unauthorized access and malware.

  3. Encrypt Your Data: Keep sensitive information safe by using encryption, which makes it harder for hackers to read or use your data.

  4. Secure Your Network: Set up strong passwords and encryption for your Wi-Fi networks, and regularly check for any vulnerabilities.

  5. Keep Software Updated: Install updates and patches for your software, operating systems, and applications to fix known security issues.

  6. Back Up Your Data: Regularly make copies of important data and verify that your backups are working. This helps you restore your files if attacked.

  7. Have an Incident Response Plan: Create a plan outlining the steps to take during a cyber attack, such as containing the breach, notifying the right people, and recovering your systems.

Remember, even with these precautions, cyber attacks can still happen. That’s why having cyber insurance is important. It provides financial assistance and support if you experience a cyber attack or data breach, helping you recover and minimize the impact on your business.

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