Cyber Liability Coverage Twenty years ago, securing your business meant locking the front door. Nowadays, your most valuable asset is your data. Hackers have taken notice; businesses are their #1 target. Are you doing enough to protect your business?
As a modern day business owner, you’ve likely felt the push to become more web-involved. The Internet seems to be where businesses are concentrating efforts, whether they involve revamping your website to keep up with the competition or creating social media accounts to attract a new audience. Of course, charting a new business course presents new risks. Navigating the Internet can be difficult enough when dealing with multiple accounts, email marketing and search engine optimization, but you’re also responsible for protecting the information that you store there. Cyber liability insurance may be the answer.
The Risk of Internet Business
- In 2008, almost 50% of businesses reported they had 1 to 5 cyber risks.
- The most expensive cyber risk incidents involve fraud, which averages a loss of almost $500,000.
- In 2008, the most common cyber risk businesses faced were viruses, followed by inside abuse and then laptop theft.
- In 2012, 36% of the business industry experienced a data breach.
- The number of education records impacted by data breaches went from 3.3% in 2011 to 13.3% in 2012.
Contrary to popular belief, nearly all businesses are susceptible to a cyber attack and your general liability policy may not cover the associated risks, which include loss of control over sensitive customer data.
To understand what protection cyber risk insurance provides, you must first understand the risk you face as a business. Cyber attacks don’t necessarily occur in the ether of Internet. Cyber attacks can also include computer hardware problems, communication media errors, system backup and operating system errors and even errors and fraud invoving internal people like system administrators.
A company can face three common types of cyber risks:
Natural: The most common errors and losses result from severe weather. For example, a lightning strike or power surge can severely damage or destroy an entire database.
Human error: These unintentional acts can involve something as simple as leaving a laptop that has access to patient medical records, at the airport.
Intentional: This involves illegal criminal activity and can occur outside the organization, by hackers or criminals, or inside the organization.