5 essentials of a Cyber liability insurance policy
Data breaches pose one of the most pressing and potentially devastating risks to businesses across the globe.
The significant financial and reputational damage resulting from a hack can impact the entire business on an unprecedented scale. The problem is increasingly widespread in our hyper-connected world, and according to the Identity Theft Resource Center, 781 data breaches were recorded in the United States in 2015, the second most active year in the past decade.
These threats continue to grow at an exponential rate, and cybercriminals are becoming increasingly sophisticated in their methods of attack. Now more than ever, it’s imperative that businesses both large and small go on the offensive to safeguard the sensitive information of their employees, partners and customers by taking the proper preventive measures and implementing a comprehensive Cyber liability insurance policy.
The term “Cyber liability” insurance is somewhat of a misnomer because people tend to equate the word “cyber” with a technological hacking event. However, a more appropriate name for the policy would be “privacy liability,” because the scope of coverage includes the loss of private information through almost any process of theft, not just virtual.
While the widely known tactics of hacking, skimming and phishing were the leading causes of data breaches in 2015, nearly 50% of total data breaches last year were the result of employee error, improper disposal of documents, lost equipment and other non-technological failures.
The costs of not securing adequate protection could be devastating to a business. In fact, the Ponemon Institute’s 2015 Cost of Data Breach Study concluded that data breaches on average leave companies on the hook for $3.79 million in damages per incident, but depending on the cause of the data breach, this number can be even higher.
Forensics and legal
Notification costs and credit monitoring
Business interruption coverage
Cyber extortion coverage
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