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.
