As cyber hacks continue to occur, businesses both large and small should address cyber security as a key component of business insurance. Did you know that in the event that your business is hacked, you are liable for client information taken from your server? Cyber security insurance mitigates some financial responsibility to the Insurance company.
Among large companies, it is estimated that 30% are covered under some form of cyber insurance policy; however, among businesses of all sizes the number is around 10%. It is important to note that while cyber attacks of large businesses make news headlines, in fact, small businesses with 250 employees or less are attacked more often and 60% of small businesses close within six months of a data breach. There are two different types of cyber insurance. Below we will discuss first and third party risks. It is important to think about possible ways to protect and insure against cyber attacks.
First-Party Cyber Risk Insurance
First-Party insurance covers damages to the Insured’s information, data, income, or other types of damage that occur due to a data breach. First-party coverage’s include:
- Theft and Fraud. This covers the loss of the policy holders data resulting from criminal or fraudulent cyber events, including theft and the transferring of funds
- Forensic Investigation. This covers the legal, technical and forensic services need to asses whether an attack has occurred, measuring the impact of a breach and stopping an attack.
- Business Interruption. This covers lost income and other costs when the insured is unable to do business after a cyber attacks or data loss
- Computer data loss and restoration. Covers any physical damage done during a cyber attack. Some damage this might include the cost of retrieving lost data, hardware, software or other information destroyed as a result of a cyber attack.
Third-Party Cyber Risk Insurance
Third-Party insurance insures the policyholder for the liability to a clients or government institutions, resulting from a cyber attack
- Litigation and regulatory. Covers the costs associated with lawsuits and other penalties stemming from a cyber event.
- Notification Costs. This covers the cost to notify clients, employees or other people affected by a cyber attack
- Credit monitoring. Covers the cost of credit and fraud monitoring, or other related services to people affected by a cyber attack
- Media Liability. Provides coverage for media liability, including coverage for copyright, trademark and other services mark infringement resulting from online publication by the insured.
- Privacy Liability. Provides coverage for liability to employees or customers for a breach of privacy.
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