In our rapidly changing digital age, information and intellectual property are quickly becoming the most valuable assets for many organizations. Our bricks & mortar world is being overtaken by the digital world we now live in.
The information age has had a huge impact on businesses. Consider just how much information businesses collect from their customers:
- Name, address and date of birth
- Social Security Number
- E-mail address
- Credit Card Number
There are a number of events that could comprise personal information such as fraud, transmission of a virus, employee sabotage, a system malfunction, a phishing scam or a hacker attack. The potential ramifications of a data breach are huge. Such a breach could cause any of the following:
- Financial loss
- Business Distraction
- Loss of Customers
- Damage to the Business Reputation
Traditional liability policies were never designed to protect businesses from these types of claims which has caused an entirely new product to be developed, commonly referred to as Cyber Liability Insurance.
The cyber risks most businesses face fall into two categories:
Losses suffered by the business (First Party Losses)
Common Policy Coverage Provided:
- Business Interruption – Loss of Revenue
- Data replacement and system rectification costs
- Public relations expenses to re-establish the business reputation
- Money paid to a cyber extortionist
- Increased costs incurred to minimize any interruption
The liability the business faces to third parties (Third Party Losses)
Provides coverage for damage and expenses the business is legally obligated to pay for such as:
- Infringement of right to privacy
- Misuse, theft or disclosure of confidential information
- Negligent internet content
- Defamation, libel or slander
- Failure to prevent transmission of a virus to a third party
Given the fact that nearly every business stores some type of information about their clients (social security number, date of birth, credit card number, etc.), whether in digital form, or kept in a paper file, it’s difficult to find a business that DOESN’T have a cyber liability exposure.
Not to worry. Cyber Liability Insurance has been developed to protect against these types of claims or lawsuits. Chances are, as a business, you need this coverage.