As various and inclusive as “the internet of things” is today, you can be sure that pretty much every type of business relies on the internet or some type of digital device or software for conducting business, collecting fees, communicating or storing important information weather personal or about a client/customer.
What is Cyber Liability and what should you do about it?
Cyber liability is the risk posed by conducting business over the Internet, over other networks or by using electronic storage technology.
As business increasingly depends on electronic data and computer networks to conduct their daily operations, growing pools of personal and financial information are being transferred and stored online. The proliferation of e-commerce and the use of smartphones, tablets and laptops in business today can leave anyone exposed to privacy violations. Financial institutions and healthcare providers are particularly exposed to potentially enormous liabilities when a breach occurs.
Cybercrime is in the news all too often these days. Just recently, Yahoo! reported that over 1 Billion user accounts were affected from a breach that occurred in 2013. Whether it is just identity theft, ransomware, denial of service attack, phishing or bank fraud, the results can be devastating. Cyber-attacks and breaches have grown in frequency, and losses are on the rise. Breaches hit a new record in 2016, soaring to 1093, up from 780 in 2015 and resulting in 169 million confidential records being exposed. The majority of the data breaches in 2016 affected the business sector, with 494 breaches or 45.2% of the total number of breaches.
So what should you do about it?
First, do an internal audit or review of your business operations and practices. Ask yourself if your business is vulnerable to a cyber attack and what all is at stake if one occurs? Do you have an incident response plan in place that meets the mandated rules of your specific state?
Start with an understanding of what information you hold and communicate on a daily basis:
- Do you deal with 1st party information, 3rd party info or both?
- Does your employee handbook address privacy and the use of electronic communication?
- Do you encrypt emails that contain sensitive client information?
- Is your Anti-virus and internet security software up to date or could it be improved?
- What if your employees who travel lose a laptop or tablet containing sensitive data on it?
- And naturally, does your General Liability Insurance or business owner’s policy cover cyber liability?
- If so, what limits, what is covered and are legal fees outside the limits or within?
Having a strategy in place is the first step. Shopping for and partnering with the right insurance company and coverage is step two.
Knowing the key features of what a good policy covers and what options within coverages are available is critical. Cybercrime is somewhat new territory and insurance companies are continuing to create coverage forms that meet the requirements of the damages Cyber crimes can unveil.
Join us for a free webinar on Thursday, April 20th at 2:00 pm EST to dig deeper into the key coverages in a good cyber liability policy.