Does Your Company Need Cyber Liability Insurance?

Category: Business Insurance

After a summer of hackers on Yahoo!, DropBox, eHarmony and LinkedIn, consumers were racked by pre-holiday 2013 hacking of retailers like Target and Macy’s. These events exposed the private information of millions of users and consumers of these services and stores.

Liability for losing employee or customer data is not usually covered in corporate insurance policies. Some policies designed to cover the liability of officer and directors may provide some coverage in this area. However, many CEOs are sad to discover that there are gaps in what will and will not be covered following a cyber attack. If you have already been attacked, it’s too late to ensure that you are covered. 

After all the high-publicity stories of personal information hacking in the news, some insurance companies offer cyber liability insurance to their clients. Sadly, 65% of companies do not carry cyber insurance, even though they do identify it as being a prime concern for their company. Tidwell Agency Insurance serves South Carolina and their agents can fully explain the importance of this insurance, and what it covers.

It would seem that high-profile companies would have a greater risk of being hacked, but small and medium sized businesses are certainly not immune to the risk. In fact, more than 70% of recent data breaches occurred in small and medium businesses, according to Forbes.com. The typical cost of a breach is more than five million dollars. Everyone is at risk.  

Some executives in the business world are not even aware of cyber liability business insurance. Even if they are, they assume that no one would attack their company. For some businesses, the high cost of premiums makes the coverage cost-prohibitive.

The premiums for this type of policy are mainly based on the industry in which your business operates. Doing e-commerce online and storing information like credit card numbers puts you at higher risk, and you will have higher premiums. Institutions that host health care data are also at high risk.

There are ways in which you can reduce your company’s premiums for cyber liability insurance. You need to work at reinforcing security practices before you decide to apply for this type of insurance. When you boost security measures, you can decrease your cost for insurance premiums, and you are making your business safer in its operation. Customers will appreciate the fact that you are striving to protect their identity aggressively.

Security experts state that one of the main concerns is that consumers and clients use strong passwords. However, even IT companies fail in mastering this. In all the summer cases of data hackers, the cause was traced to weak passwords that were not changed on a regular basis, or not encrypted.  

If your identity is hacked, are you covered under your business insurance? Usually, the simple answer is “no”. Contact The Tidwell Agency to find out the best ways to cover your business.  

Source:

http://www.forbes.com/sites/rajsabhlok/2012/10/18/do-you-really-need-cyber-liability-insurance/

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