Cyber Crime & Your Business
October 26, 2023
Cyber attacks are a significant issue for every risk manager and business with any computer device and electronic data. If you have not suffered a cyber incident such as a system hack, data theft or held hostage for ransom, or a phishing email scam, sit tight because the possibility is more significant than you might think. Your business may have, unknowingly, already suffered an incident.
Because of this, it is critical for a business to implement a robust internet security program and train employees on how to identify and report anything suspicious. Unfortunately, even with these programs, there is still a possibility of your network being compromised.
Breaching systems and stealing money and data is big business for cybercriminals and can devastate your business into bankruptcy. There are many expenses associated with a cyber incident, such as the cost to recover your data, legal fees, media mitigation, crisis management, and possible regulatory fines if employee or customer information is stolen.
Cyber insurance can help with these expenses, including fines and defense costs. Defense costs and penalties are usually within the policy limits, a deductible may apply, and there may be exclusions, such as war.
Most Cyber policies include the following coverages:
- Security Breach Expenses
- Affected Party Notification
- Employee salary to handle inquiries
- Affected Party Post Monitoring
- Media Mitigation
- Data Replacement/Restoration
- Business Income & Extra Expense
- Security Breach Liability
Depending on the business operations, Cyber coverage may be added as an endorsement to your commercial package policy or as a separate policy. Many different endorsements may be available as well. Regardless of how coverage is obtained, though, it is essential to understand the policy coverages and exclusions.
When applying for cyber coverage, it’s essential to understand that the larger the coverage request, the more underwriting scrutiny will be placed on your current internet security and employee training programs.
Cyber liability risk is complex and dynamic. Therefore, businesses must include the need to address such risks in their regular business planning. Insurance is a risk transfer to protect your business from financial hardship, but even when you are insured, your business benefits when you take responsibility to prevent losses from occurring.
Since not all cyber policies and coverages are created equal, contact a First Western Insurance professional to discuss your business coverage needs.
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