Identifying Cyber Liability Risks

Posted on: October 27, 2016 by Goodrich & Watson

If you watch or read the national news (or are following the presidential race), you’re well aware that computer hacking attacks have reached epidemic levels. Hillary Clinton’s campaign chairman John Podesta was hacked by WikiLeaks, Russian operatives are suspected of hacking into the Democratic National Committee, and corporate giants including Home Depot, Target, and Ebay (to name just a few) have been infiltrated by hackers. If you think you’re immune to Cyber Liability Risks as a small business, think again! According to the Insurance Information Institute small businesses absolutely should make identifying cyber liability risks a top priority.

If Your Business is Hacked, It Will Cost You

A computer hack is much more than an inconvenience that requires you to change your passwords. Regardless of what type of business you have and its size, here are some ways a cyber attack may cost you.

Third-party liability costs. Criminals may have targeted your equipment, but you must assume that they stole not only your personal data but your vendors’ and customers’ personal data. If third parties incur costs related to a cyber attack on your business, you could be required to cover those costs.

Notification costs. If your customers’ data has been compromised as a result of a cyber attack on your business, you’ll need to let those people know. Nearly all states (including Virginia) and the District of Columbia have laws requiring businesses to notify customers in the event of “personal information” breaches. These state notification laws apply not only to businesses that own or license customer’s personal data, but also to businesses that maintain or control personal data they don’t own (such as vendors that manage subscriber databases.) Sending out letters or paying individuals to call all affected individuals can be expensive.

Computer repairs and upgrades. A computer hack can damage your computer systems and erase data you need to operate. You’ll need to hire professionals to recover and/or restore your data as quickly as possible so you minimize business-disruption losses.

Fines. If it can be proven that your data breach occurred because your business didn’t comply with consumer data protection regulations, you could be subject to stiff fines.

A stand-alone cyber-liability insurance policy will protect your business from the financial fallout of a data breach. Operating without this coverage is extremely risky. Contact Goodrich & Watson today to protect your business against this growing threat.

 

Posted in: blog Business Insurance Contractors Insurance Cyber Liability Insurance Professional Liability Insurance Virginia

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