Today, most organizations store information in cloud storage, where they can access them easily on demand. Digitization continues to spread globally, and new technologies make things easier, including for small and micro-enterprises.
Industries are adopting new techniques that address traditional problems like data security and speed. However, they also present a new set of challenges, a major one being cybersecurity.
If you run an enterprise that handles critical data, a cyber liability insurance cover is indispensable. Now that you know your business needs, let's dive a little deeper into cyber-crime and cyber liability insurance in Texas.
Cybercrime is a concept that came to be after the invention and continued use of the internet. It is a general name that stands for all malicious activities or crimes happening on the internet. Cybercrimes have been rampant in recent days, especially after the introduction of digital coins.
Cryptocurrency companies are now the prime targets of cybercriminals. They are managing to bypass the blockchain technology security protocols, making away with millions worth of cryptocurrencies. In 2020, personal information of over 270,000 Bitcoin users was published online in what was termed a massive data breach.
Is cyber liability insurance worth it? Cyber liability insurance is a relatively new concept in the business world. It is becoming more profound with modern technology and the digitization of services, including financial services.
Companies hold essential information that can be third-party data, employee information, or their suppliers' details. Some of these details are personal data, usually stored electronically, and risk getting hacked. Ideally, what cybercriminals do is gain access to sensitive organization data and hold it hostage. This form of a cybersecurity breach is known as cyber extortion. They then threaten to release the information to the public and claim a certain amount of money.
There are several forms of cybersecurity breaches although cyber extortion is proving the most common in the United States.
In the event of losing such data or access by an unauthorized party like a hacker, the company could incur significant expenses to recover the lost data. Such organizations usually have the responsibility of safeguarding the data, and in case of a breach of this responsibility, the other parties can sue them for damages.
As a result, entities resort to insuring their data to cater to such expenses that might occur unexpectedly. That's where the concept of cyber liability insurance comes into play. According to a cyber-security breaches survey in the United Kingdom, over 35% of businesses encountered a security breach in 2017.
Cyber liability insurance comes in to guard your business against such internet risks and helps you recover the associated costs in a worst-case scenario. Getting coverage for your business is the ultimate solution although it's important to first reach out to experts.
At CoverWallet, we provide you with different insurance types and advise you on your business's right type. You can reach out to any of our consultants at any time and get an appropriate quote for your needs within minutes.
Cyber insurance what does it cover? There are different risks for which an organization can take cyber liability insurance coverage. Let's take a look at cyber insurance coverage explained in first- and third-party coverages.
First-party liability coverage safeguards the company from the losses occasioned directly by the security breach. Most cyber liability insurance first-party coverages will include:
Cyber Extortion: Cyber extortion occurs when a hacker gains access to your computer system and gets hold of sensitive information. They can threaten to do anything like introducing a virus to the system, damaging the data, releasing it to the public, or executing a denial of service attack unless you pay them a sum of money. It can be to the tune of thousands of dollars depending on how sensitive the information is or the company's size. The cyber extortion coverage will cover the lump sum paid to the attackers, plus any other expense incurred in the process of responding to their demands.
Loss of Electronic Data: This coverage caters to the costs incurred in recovering lost or damaged data from a cyber-crime. The loss must be occasioned by an insured risk, such as a denial of service attack, hacking, or virus attacks. The cost will include all expenses incurred to restore the data, including the cost of consultants and experts in data reconstruction.
Notification Cost: If hackers steal and expose personal data from a company, the law requires the organization to notify the affected parties or potential victims about the breach within a specified time. The number of people involved can be relatively high, and this makes achieving the goal somewhat challenging. The company identifies potential victims through internal investigation processes, making notification costly. The insurance coverage meets these expenses whether the notification is by law or the company does it voluntarily.
Loss of Income and Additional Expenses: A cyber-security breach is enough threat to take a multinational company down. Businesses risk exiting the market or incurring additional expenses to avoid a shut-down. First-party coverage includes this coverage that caters to the expenses and the income lost in saving the business.
Reputation Protection: The coverage caters for the cost of repairing and maintaining your business's reputation following a cyber attack. It is also known as crisis management and includes public relations and marketing efforts.
Third-party coverages address the business's expenses due to the victims' actions affected by the security breach. The costs do not result directly from the attack itself. It includes:
Privacy Breach and Network Security: Your business could face accusations for the omission or negligence that resulted in the attack. Victims could also allege that the business failed in its responsibility of protecting sensitive personal data. The privacy breach and network security coverage covers the costs of compensating victims for such claims.
Media Liability Cover: Covers the business against several media claims such as defamation, libel, slander, plagiarism, domain name infringement, and privacy breach. These are the claims that result after the data hacked gets published on the internet.
Regulatory Fines: This coverage caters to the penalties imposed on your company for breach of data laws and compliance regulations. It includes the penalties and the cost of hiring a lawyer.
Cyber liability insurance covers most of the direct and indirect losses caused by a cyber attack. However, companies need to get the cover in conjunction with other insurance policies since some expenses are not included. Some of them include:
Loss of Value Caused by Intellectual Property Theft: Loss of intellectual property is a significant blow to a company both in the short run and in the long run. However, this loss is not included in cyber liability insurance, so organizations need to get an intellectual property insurance cover.
Property Loss: Property loss falls under commercial property insurance, and so your business' cyber liability insurance cover will not cover physical property loss.
Personnel Training and Education: An organization's workforce can intentionally or unintentionally create vulnerability due to the lack of skills and technical knowledge. Companies can incur costs in employee cyber-security training pre- or post-attack although the cost is not covered in cybersecurity insurance.
Every business needs an insurance policy, and in most cases, more than one policy makes your business safer. It's not easy for your business to run with a few lawsuits, ranging from property damage to employee injuries, and many others.
If you are running a modern business in the digital space, cyber security is one of the critical things you need to invest in. You need to have peace of mind so that you can focus on more other important aspects of the business. For you to achieve this, CoverWallet offers cyber services. Our firm prides itself as the best among all cyber liability insurance companies in Texas.
We are a one-stop-shop company for all cyber risk liability insurance needs. Our services range from general insurance liability to excess liability so that you will look no further for cyber liability insurance Texas.
At CoverWallet, we take pride in having an intelligent assessment system that helps you identify the insurance coverage that suits your business and budget. We provide free quotes within minutes. All you need is to complete your online application.
Our consultants are always available, and you can reach out to speak to one whenever you need us. Whether your business is new or an industry leader, our team is well-versed with the different policies and always takes personalized approaches to addressing clients' needs. They will advise where expansions or enhancements are necessary. Reach out to us today.