Cyber Threats and Liability: A Close and Critical Look.

Cyber insurance is simply a must in today’s world where security breaches are commonplace, even among the most well protected companies. The ugly reality is that cyber-attacks result in the loss of hundreds of thousands and even millions of dollars, not to mention the immeasurable loss of a company’s reputation. The magnitude and reality of the problem is detailed in the startling statistics below.

Statistics/Risk Factors

  • Average internal investigation costs associated with 5,000 compromised files: $831,360.
  • Cyber-attacks are increasing in sophistication and frequency every single year.
  • 50% of attacks were on companies with 2,500 or fewer employees.
  • 31% were on companies with fewer than 250 employees.
  • Average of $188 per compromised customer record.
  • The average company confronts more than 5,000 security threats from malware every month.

Managing Risks

So how can businesses better manage the risks related to a data breach and reduce the significant cost that can result from them?

Multiple and more sophisticated safeguards are being put in place every day. However, cyber insurance is a must. In the vast majority of states, federal or state laws may mandate that your company take (and bear the expense of) certain measures in the event of a security breach. So let’s look at some ways to evaluate policies.

Measuring Your Policy

Who is covered?

Your policy should include the:

  • company
  • directors
  • employees

What is covered?

Your policy should cover:

  • Cyber Liability
  • Privacy Notification and Crisis Management Expenses
  • Reward Expenses
  • E-Threat Expenses
  • E-Vandalism Expenses

What expenses are covered?

The cost of repair can be enormous. Make sure you are adequately insured.

  • Privacy notification expenses.
  • Cost of monitoring and restoration services for affected customers.
  • Crisis management and privacy notification expenses.
  • Cost of legal counsel and information security forensics investigators.

Keeping our clients informed and educated is a cornerstone of our Professional Client Care® program. As always, feel free to call us to discuss this issue.