Posted on: December 8, 2016 by Goodrich & Watson
If you believe that Cyber Liability Insurance is an optional coverage that only giant corporations need, you should reevaluate that belief. Hackers and phishers cast a wide net. The average data breach costs nearly $160 per affected record; so even if you have a list of 100 customers, if their data is compromised that’s a huge financial hit. Additionally, cyber liability insurance covers honest employee mistakes that jeopardize client data. Unless you and your employees are foolproof, this coverage is crucial.
The Journal of Risk and Insurance defines cyber liability insurance as a policy that protects a business from a data breach that compromises customers’ private information. Usually, these breaches originate from Internet use that without security protocols in place.
Today, discussions about businesses and the Internet don’t focus on whether a business uses the Internet. They focus on how businesses use the Internet. It’s a digital world. Technology has become more sophisticated. So have criminals. If the Democratic National Convention, Twitter, and Spotify can be hacked, so can your business. According to an article in Forbes magazine, if you want to avoid being hacked or falling victim to a phishing scam, these simple steps can help tremendously:
• Update your passwords regularly and use a combination of upper and lowercase, numbers, and symbols.
• Use security questions that are not public knowledge.
• Never download or click on suspicious links.
• Delete your cookies regularly.
Risks from hackers and phishers are just one reason why businesses need cyber liability coverage. Here are a few other examples of actual cyber liability claims.
A business sold its used computer — without removing sensitive customer information. When the mistake comes to light, the business had to notify all affected customers (a huge expense) and was sued by two parties claiming the business’s negligence caused them financial damage.
A hospital employee gained access to a patient’s confidential medical records and disseminated the information. The hospital had to pay more than $300,000 in settlement and defense fees.
An employee lost a laptop that included clients’ sensitive financial records. His employer has paid more than $700,000 defending lawsuits filed by clients whose information was on the laptop.
If you’re concerned about cyber liability or any other business exposures, contact us at Goodrich & Watson. Our independent insurance agency serves residents and businesses throughout Virginia. When you turn to us to protect you and your home, automobiles, and personal valuables or your business property and assets, you can depend on our expertise, experience, and attentive service.