When looking to purchase any type of insurance, a broker that has expertise in the area will efficiently help clients decide what type of coverage is needed for their individual circumstances. Finding the right broker is especially important when shopping for data breach liability. Steve Longenecker and the team at Mountain Insurance: Longmont have the experience and knowledge to determine the most cost-effective amount of data breach liability coverage necessary for the specific cyber risk of a business.
According to the International Risk Management Institute, cyber liability insurance consists of “policies [that] are intended to cover a variety of both liability and property losses that may result when a business engages in various electronic activities, such as selling on the Internet or collecting data within its internal electronic network.” Cyber liability insurance differs from technology errors and omissions insurance, which specifically covers businesses that provide technological products or services, such as website designers, software or hardware manufacturers and off-site corporate data storage firms.
Since the onset of COVID-19 last year, cyber liability attacks have increased by over 400% to more than 4,000 per day worldwide. The average time to recover from a cyber attack is several months, with an average cost of around $1,000,000. Even small businesses that simply collect credit numbers are at risk, since they are not typically protected by their merchant processor.
Cyber Liability Insurance can cover the following areas:
- Data Breach – When the cyber security of your business has been compromised, a long list of expenses can follow such as investigation and remediation costs, notification of affected parties and subsequent credit monitoring, legal expenses, including costs to defend claims by state regulators, and any resulting fines and penalties.
- Multimedia – If your business’s website has been marred or your intellectual property rights infringed upon, then this type of coverage will address third-party damages. The costs associated with website media content violations may include business interruption, data destruction or loss of funds during transfer.
- Network Security – Also designed to deal with third-party suppliers and/or systems, this liability covers damages from access denial and data theft costs.
- Extortion – The losses and professional fees acquired when dealing with a threat of extortion are covered under this area of Cyber Liability Insurance.
Any business, from retailers to contractors, banks to medical offices, restaurants to distributors, that collects personal information needs to be actively taking steps to protect the privacy of that data. With today’s rapidly advancing technology, the threat of a data breach incident is a very real possibility for nearly every kind of business. Don’t leave your business unprotected. Contact the experts at Mountain Insurance: Longmont for the right combination of pricing and coverage for cyber liability insurance.
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