The COVID-19 pandemic has affected everyone. Reading my posts, you know that cybercriminals have benefitted the most. That’s why cybercrime has shot up by a whopping 300% since the beginning of the pandemic—you must adopt the necessary measures to protect your business from malicious cyber players. One of these measures is to have Cyber Liability Insurance (CLI).
CLI covers the financial loss that results from data breaches. However, cyber liability is not typically included within general liability insurance and must be purchased separately. Also, each company offering a policy has different coverage options and exclusions.
Why invest in cyber liability insurance?
Experts estimate that the damage inflicted by cybercrimes will add up to about $6 trillion globally in 2021. That’s higher than the GDP of the world’s third-largest economy, Japan, which sits at $5.38 trillion.
These statistics stress why Small to Medium Sized businesses (SMBs), in particular, must have cyber liability insurance:
- 40% of cyberattacks target SMBs.
- 60% of SMBs have experienced cyberattacks in the past 12 months.
- 45% of SMBs say their processes are ineffective at stopping attacks.
Liability insurance could be the difference between your business sinking or staying afloat after a security incident. Without it, the expenses you might have to bear after an incident could financially harm your business in the short term or, in the worst case, result in permanent closure.
Costs of post-data breaches include
- Downtime
- Investigation
- Recovering data
- Legal procedures
- Notifying stakeholders about the incident
- Restoring the personal identities of those affected.
A good liability insurance policy would usually cover these expenses. But remember that before you commit to a policy, you must get clarity from your insurer about what they cover.
Does your business need it?
Any venture with cyber exposure must consider having cyber liability insurance. However, CLI should be your top priority if your business handles or stores sensitive information online, such as electronically protected health information (ePHI) or personally identifiable information (PII).
Make sure your CLI has the following essential coverages:
First-party coverage:
- Network security and privacy liability cover costs like forensic investigations, public relations, credit monitoring, legal fees and fines/penalties.
- Business interruption losses and extra expenses cover lost revenue and added costs to continue the business.
- Digital data recovery and cyber extortion expenses cover losses such as ransom paid because of ransomware.
Third-party coverage:
- Covers claims of lawsuit expenses resulting from breaches in client systems or networks.
- Media liability covers libel claims, copyright/trademark infringement, etc., resulting from media use.
Cybercrime coverage:
- Covers losses from digital theft of money or securities and social engineering fraud.
Who are the top cyber liability insurance carriers?
Finding the right liability insurance provider is difficult. While most general insurance providers offer broad liability coverage, they don’t always provide comprehensive coverage. Choosing an insurance provider rated ‘A’ or higher is always ideal.
The following insurance carriers are worth considering:
- Chubb
- AIG
- Travellers
- AXA XL
- AmTrust Financial
- Co-Operators.
But remember, just committing to a policy is not enough. You will also have to track/measure compliance with the agreement to ensure your contract is always valid and will payout in the event of an issue.
Having the right partner by your side simplifies this process.
Whether you are looking for a cyber liability insurance policy that is right for your business or trying to find and measure your policy’s compliance with cyber liability insurance contracts, we are here to help.
Not sure where to start? Cyology Labs can help you understand how to increase your chances of receiving coverage and a payout in the event of an incident. To learn more, reach out to schedule a no-obligation consultation, or visit us at https://www.cyologylabs.com/cyberinsurance
Finally, don’t forget to download our mobile app, FRAUDSTER, available on Apple and Android. You can learn more at www.FraudsterApp.com
