Do You Really Need Cyber Liability Insurance?
Data Security Breaches • E-Vandalism • Lost Laptops
In today's technology driven world the risks associated with doing business online and storing sensitive customer data electronically have never been greater. Cyber risk is steadily increasing and data breaches now affect hundreds of millions of records a year. It is not just for large to mid-size companies, it can affect the small business owner too. Whether you store customer information on your computer, in the cloud, use an I-square or other methods to take payments, all of these day to day operations can expose client information. It is important that you are properly covered for this type of exposure. Liability for loss of customer or employee data is not typically covered under a corporate insurance policy. Some existing business insurance policies that offer general liability and directors and officers liability may provide a measure of coverage for those areas; however, most business-owners discover significant gaps in what is and what isn’t covered after an attack. Unfortunately, by then it’s too late.Reports of breaches continue to rise at a dramatic rate and there is not a week that goes by without another company (from large corporate enterprises to small local businesses) reporting a loss as a result of a cyber attack. According to a recent study by the U.S. Secret Service and Verizon Communications, Inc., over 72 percent of all data breaches occurred in SMB businesses.It does not even have to be a hacker - losing a company laptop with sensitive customer data (such as Social Security numbers or credit card details) also opens you up to cyber exposure. You are responsible for protecting this data and can be liable if it is compromised.
The fact is that cyber security threats can result in significant out-of-pocket and reputational costs to a company. For example, did you know that many states now require companies to notify all of their customers if a breach is even suspected and to take necessary steps to correct the situation — a cost estimated at up to $30 or more per customer. Multiply these costs times your company’s total number of customers, and you’ll see how the financial cost can wreak havoc with your bottom line to say nothing of the effect it will have on your customers' trust and confidence in your company.*
Foy Insurance strongly encourages business owners of any size to contact their agent to discuss what options are available. If you have further questions, we have insurance professionals that can assist you in answering those questions and will work closely with you to find the right solution for your business.