According to Cybercrime Magazine, cybercrime is predicted to inflict $6 trillion in damages globally in 2021 alone with a 15% growth year-over-year over the next five years. Even more alarming is the finding that over 50% of all cyber attacks committed are on small businesses and 60% of those businesses go out of business in six months of the attack.
No matter how much technology is integrated into your business process, any amount of technology makes you vulnerable to attack, which could cost you significant money as well as your reputation.
At the beginning of stay-at-home orders last March, we stressed the importance of cybersecurity insurance for businesses who were able to operate remotely. Now, riding the news of a government-wide cybersecurity breach, companies are coming to us with even more questions about cyber liability protection.
In order to eliminate confusion surrounding cybersecurity we decided to do a rollup of frequently asked questions!
What is Cybersecurity Insurance?
Cybersecurity insurance, also sometimes called cyber risk insurance, cyber liability insurance, or data breach insurance, is a type of insurance that can protect your business from hacking, data breaches, and online activities like electronic document transfer, intellectual property violations, and a whole slew of computer security failures.
What Does Cybersecurity Liability Insurance Cover?
Although the coverage can change based on the policy, cyber liability insurance can help cover the expenses that come as a result of a cyber attack. Depending on the policy you select, some additional coverages could be:
- Loss of earnings and expenses as a result of the attack
- Legal expenses or IT forensic costs to determine obligation and to protect against defamation, libel, slander, invasion of privacy, and copyright or intellectual property damage
- Credit monitoring expenses
- Public relations consultants to mitigate damages
Isn’t Cybersecurity Liability Insurance Covered Under My Business Insurance?
Not usually. Although there are some liability claims that can be filed through general liability insurance clauses in some business insurance policies, many policies have adapted their language over the years to exclude many cybersecurity claims.
Am I Required to Have Cyber Liability Coverage?
There is no law stating that you must carry cyber liability coverage however it is strongly encouraged that all businesses add this policy for their own protection. There are even some instances where clients or vendors opt to not work with a company who does not have cybersecurity protection.
Do I Still Need Cyber Liability Coverage If I Use Outsourced Payment Processing and Data Storage?
While outsourcing your payment processing, data storage, web hosting, and more can help protect you from risk, you still need to protect your customers and your own reputation no matter the cost, and there are instances where your business can still be held liable
Is Cyber Liability Coverage Right For Me?
Yur agents are ready to help you figure that out! We can help talk through your unique needs and determine what policy is right for you. Call 610-770-6600 to get started today.