Cyber Liability Insurance Protects Your Business from Rising Cyber Threats

Whether a multi-national corporation or a local family run business, any business that uses technology is exposed to risk. Businesses should plan for possible cyber-attacks by adding Cyber Liability Insurance onto their existing insurance program. As technology becomes increasingly sophisticated, cyber threats to businesses also evolve. Recent world events have highlighted the threat cybercrime poses to businesses as, President Biden has warned American business owners to be prepared for Russian cyber-attacks by strengthening their cyber defenses. (1) To help manage cyber risk, it’s more important now than ever to include Cyber Liability Insurance as part of your business insurance package.  

Cyber Liability Insurance is No Longer Optional 

The amount of data created daily is staggering and increases the likelihood of businesses falling victim to cyber-attacks. In fact, “the world now creates an estimated 2.5 quintillion bytes of data of every day-that’s 2.5 followed by 18 zeros.” (2) More data means additional opportunities for hackers to access sensitive data. As our reliance upon technology grows and the world becomes more digital, the volume of data increases and cyber criminals have more chances to wreak havoc. By the end of 2021, there were approximately 14.6 billion connected devices. (3) That number is predicted to grow by as much as 18% by the end of 2022 and could double by 2027. As a result, cyber liability insurance has become a necessity for any business. It is no longer a matter of if a business will experience some form of cyber-attack but when. 

Shift to Remote Work Further Compromises Cyber Security for Businesses 

The Covid-19 crisis shifted the world into an even more remote or hybrid work environment, which has endured. According to Gallup’s monthly employment trends, as late as September 2021 as many as 45% of full-time U.S. employees worked from home either all or part of the time. (4) Remote access tools, cloud services and personal devices can compromise a company’s existing security measures and open new ways for cybercriminals to carry out cyber-attacks. Simple oversights by employees can pave the way for hackers and compromise sensitive company data including: 

  • Leaving a laptop unattended at a coffee shop,  
  • opening an infected email,  
  • not using a strong enough password, 
  • a mobile phone left in an Uber,  
  • a tablet getting stolen from an employee’s vehicle or 
  • entering company credit card information into an unsecure website. 

The frequency of cyber-attacks has been steadily increasing from year to year, but also hackers have begun to capitalize on the new shift to remote work by developing new forms of malware and other tactics to steal data. In a recent article from the Insurance Journal, Jeff Dennis, partner at law firm Newmeyer Dillion, said “in addition to traditional attack methods like data encryption, in which ransomware criminals restrict access to a victim’s system until a ransom is paid, criminals are now stealing data and threatening to release it on the dark web without the payment of a ransom. In some cases, criminals are even contacting and threatening customers whose data has been stolen from victim companies, he added.” (5)  

What is Cyber Liability Insurance?  

Cyber liability is also sometimes referred to as data breach or cyber fraud insurance. Cyber liability insurance provides businesses with the resources to prepare for, respond and recover from cyber-attacks and other cyber security issues. (6) In general, data breach insurance typically offers enough protection for small business owners while cyber liability insurance offers larger organizations broader protection.  

What Kind of Costs Does Cyber Liability or Data Breach Insurance Help With?  

The coverage provided by each cyber liability or data breach policy varies depending on the individual policy and by the insurance company providing the coverage. Some expenses cyber liability or data breach insurance can help with include (7):  

  • Lost income or business interruption expenses due to a cyber event 
  • Litigation expenses related to the breach 
  • The cost of notifying customers, patients or employees affected by a data breach 
  • The expense of recovering compromised data 
  • The cost of hiring a public relations firm to handle backlash and reputational damage due to the cyber attack 
  • Cyber extortion costs 
  • Regulatory defense expenses or fines 
  • The cost of forensic investigations 
  • The cost of repairing damaged computer systems, etc.  
  • The cost of offering credit monitoring services to victims 
  • crisis management expenses 

cyber liability insurance

What Does Cyber Fraud Insurance Cost?  

Numerous factors impact the cost of cyber liability or cyber fraud insurance for your company. No two companies face identical risk factors so cyber liability insurance for your business may cost more or less than another company within the same industry. Factors that influence the cost of cyber liability insurance for a business include (6):  

  • the number of customers or patients the business serves, 
  • the amount and type of sensitive data the company stores,  
  • the company’s claims history, and  
  • the company’s revenue.  

How Can I Get Started Protecting My Business from Cyber Security Threats? 

There are many steps you can take to help make your business less susceptible to cyber fraud, cyber security attacks, and hackers. 

  1. Begin by running an assessment of your current systems-Make a list of all laptops, desktop computers, tablets, mobile phones, and servers, including both software and hardware. Keep the list in a secure location and only allow access to a few trusted associates or principles.  
  2. Back Up Your Data Regularly-Many ransomware attacks lock people out of their computers or devices and don’t allow access until a ransom has been paid. If a company’s data hasn’t been backed up, paying ransom is the only way to recover the data. However, businesses that regularly back their data online or on the cloud, can wipe the computer to remove the ransomware and then re-download the data. (8) 
  3. Use Strong Passwords and Multi-Factor Authentication- Encourage employees to use strong passwords or use a random password generator. Make use of multi-factor authentication. Multi-factor authentication is a login process requiring users to enter multiple passwords to verify their identity.  For example, after entering an initial password on a laptop, a security code is sent via text to a mobile device, that must be entered on the screen to verify the person’s identity.  
  4. Employee Education is Key- Make sure your staff are educated about the importance of keeping data secure and are trained in ways to avoid cyber risk. For instance, your employees should be educated how to avoid phishing scams, how to spot suspicious emails and basic security measures such as locking your computer when stepping away from your desk.  
  5. Make Use of Anti-Virus Protection & Firewalls- Anti-virus software consistently scans for threats and neutralizes them. Anti-virus software used in combination with a firewall, offers comprehensive protection in that anti-virus software protects your systems hardware while the firewall protects the actual network the hardware runs on.  
  6. Create a Cyber Attack or Data Breach Plan- Having a clear protocol outlining the steps to be taken if a breach or cyber incident occurs, will help ensure your business deals with an incident quickly and efficiently.  
  7. Perform Regular Audits-Regular audits of IT infrastructure can help detect threats and vulnerabilities and identify high risk practices, which can reduce chances of a cyber-attack. (9) 

 

Protect Your Business with Data Breach or Cyber Liability Insurance  

Cyber-attacks and data breaches have become more sophisticated and more frequent in recent years.  The Covid-19 Crisis further contributed to a rise in cyber fraud. These cyber events are costing businesses more than ever, with the “average cost of a data breach for a small businesses at $108,000.” (10) It’s critical that businesses take steps to minimize their risk while protecting their digital assets. Plan for cyber threats with cyber liability insurance from the experienced commercial division at McSweeney & Ricci Insurance.  

Every business is unique, and any business can fall victim to a cyber-attack. Our team will review your existing business insurance program and secure the proper amount and type of cyber liability insurance to address your specific risks. We can’t guarantee your business won’t experience a cyber event, but we’ll partner with you to help minimize your risk and help you get back to business as quickly as possible after a qualifying cyber event.  

For over fifty years, McSweeney & Ricci has provided personal and business insurance protection to thousands of individuals and businesses from the South Shore to Boston and throughout Massachusetts. We offer personalized home insurance, auto insurance, business insurance and cyber liability insurance for businesses and much more.  

For more information on adding cyber liability insurance or cyber fraud insurance to your existing Massachusetts business insurance program, submit for a free quote here on our website or give us a call at (844) 501-1359. 

 

Sources:
  1. Biden warns business leaders to prepare for Russian cyber attacks – CNNPolitics 
  2. CloudTweaks, “Infographic: How Much Data is Produced Every Day?” accessed on Nov 15, 2021. 
  3. Ericsson Mobility Visualizer, “Connected Devices,” accessed on Nov 15, 2021. 
  4. Remote Work Persisting and Trending Permanent (gallup.com) 
  5. Triple Threat: Ransomware Criminals Add Data Theft, Manipulation to Encryption Tactics (insurancejournal.com) 
  6. Cyber Insurance | Cyber Liability | Data Breach Insurance (thehartford.com) 
  7. What is Cyber Liability Insurance? | Travelers Insurance 
  8. 10 Crucial Cyber Security Tips for Small Businesses in 2022 (networkassured.com)  
  9. IT Security Audits: The Key to Success (netwrix.com) 

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