Cybercrime is ever-evolving. Cyber Insurance is a specific type of Business Insurance designed to protect an organization from the financial impacts of a data breach. This coverage is also referred to as “Cyber Liability Insurance” or “Data Breach Insurance.” For businesses of any size or industry that are conducting business online, it is essential. And the threat of cybercrime is significantly greater for businesses that store sensitive personal information – regardless of whether or not that data is being stored online.
The financial consequences of a data breach can be crippling. A Cyber Insurance policy from Webb Insurance in St. Charles, Mo. can help provide the peace of mind that your organization is prepared for the risks of conducting business on the internet.
Types of Cyber Insurance
A robust Cybersecurity Insurance policy consists of different coverage components that will help mitigate your organization’s losses in the event of a data breach. A comprehensive policy includes:
- Protection for the Affected Organization
To cover financial losses resulting from recovering lost or stolen data, repairing any network issues or technology equipment, legal fees for any civil suits, and PR services to help manage loss of business and reputation damage.
- Protection for Affected Third Parties
To cover financial losses incurred as a result of sending physical mail to notify affected patients or clients, and providing credit monitoring services for a specified period of time.
- Protection against Data Breaches
To help an organization reduce their overall cyber risk by providing training, webinars or other educational materials that could help prevent a data breach from occurring in the first place.
Cyber Insurance Key Terms
- Personally Identifiable Information (PII)
Also referred to as Sensitive Personal Information (SPI). PII or SPI is data that can reveal a person’s identity, either on its own or in combination with other information. Examples include, but are not limited to: a person’s date of birth, telephone number, full facial photo, Social Security Number, or home address.
- Personal Health Information (PHI)
Broadly refers to any part of a person’s medical record. A medical record contains PII, such as an individual’s full name and date of birth, as well as information about the individual’s health status and treatment for any health conditions.
Short for “malicious software,” or software that is designed to harm or disable a computer, server or computer network. There are many types of malware that can cause or enable a data breach, which can include but are not limited to: ransomware, viruses, spyware, bugs, worms and Trojans. It is important to remember that malware can cause a data breach, but many data breaches are not the result of malware.
LEARN MORE: Access our complete Glossary of Insurance Terms.
Cyber Liability Insurance FAQs
Cybercriminals are extremely sophisticated in their use of technology to exploit and harass even the most sophisticated of corporations. If you have seen the data breach headlines but need help with the fine print, you may be wondering:
- Why do I need a Cyber Insurance policy?
A standard Business Insurance umbrella policy, with Business Liability or Business Personal Property coverage, does not provide protection for losses resulting from a data breach. In other words, if you do not specifically have protection for cyber liability, you are completely exposed to any losses resulting from a cyberattack on your business.
- What kind of organizations need Cyber Insurance?
Many people operate under the assumption that only large corporations or healthcare systems need Data Breach Insurance, but this simply is not true. They can happen to anyone, and every organization should be carrying coverage that is proportional to their overall risk. If you are storing any type of data for your business at all, you are at risk. If the data you are storing is credit card data, health data or PII, your risk is that much greater. This is true whether your data is stored online, offline, on premises, or off-premises.
- Hackers go after big companies. Why should I be worried about cybercrime?
When major hospitals and retail giants like Home Depot and Target are breached (and both were!) it will make the news because of the magnitude of people who are impacted. In this case, it is much safer to assume that if a huge corporation with a sophisticated IT staff can fall victim to a data breach, it can happen to anyone. In fact, small businesses are typically at greater risk because they are seen as much easier targets for hackers to break in to.
- How expensive can a data breach be? Can’t you clean the malware from your system and move on?
When your personal computer is hit with a virus, you may be able to clean it off and get back to normal. The opposite is true when business data has been breached.Currently, 48 out of the 50 United States have breach reporting protocol that will require you to notify any person whose data may have been breached by physical mail. This may result in the affected parties taking legal action against your business, and will almost certainly have financial consequences by tarnishing your company’s reputation.Without Cyber Liability Insurance, damages could range from thousands to millions of dollars – which could be the difference in keeping your doors open.
- Is Cyber Insurance the same as Technology Errors & Omissions coverage?
Technology E&O is designed to protect an e-commerce company from mistakes in their services or products. This coverage is ideal for companies whose sole existence is technology, such as a web developer or an IT consultant. Cyber Insurance, in contrast, is designed to protect against losses as a result of data being lost, stolen or recklessly compromised.
How a Data Breach Happens
Data breaches resulting from an off-shore hacking incident are just one type of scenario that would be covered by Cyber Liability Insurance. The truth is, data can be compromised through everyday mishaps, such as:
- An email containing sensitive information is accidentally sent to the wrong person
- A company laptop or cellphone is stolen
- An unencrypted USB drive is stolen
- A building is broken into and paper files are stolen
- A patient record is lost or misplaced in a filing system
- Client information is left out on a front desk or other area where it can be viewed by others
- A picture is posted on social media that contains harmful or inappropriate content
- A picture is posted on social media where someone else’s personal information can be seen
- A computer is left unlocked for a period of time where it was accessed by others, such as a bathroom break or overnight
- A patient record is improperly destroyed (i.e., recycling instead of shredding)
Getting Started with Cyber Liability Insurance
Webb Insurance is proud to support local and small businesses in the St. Charles and St. Louis community. Let us help you find the right mix of Business Insurance to protect your organization, and assess your overall risk for a data breach. We will help you identify an appropriate level of Cyber Insurance coverage, and give you the peace of mind in knowing your business is protected if the worst does happen. Learn more about our specific expertise by filling out the free quote request below, or listening to this podcast with Al Rodriguez, Commercial Lines Sales Manager of Webb Insurance – https://webbinsurance.com/al-talks-cyber-liability/.
As an independent broker, we are able to write Cyber Insurance in all 50 of the United States with the industry’s top-rated companies. Are you ready to set up your data protection?