Cyber-crime is no longer a plot device for sci-fi flicks. It’s here, and it’s rampant. It affects countless companies around the world every day. Allianz’s Risk Barometer ranked cyber incidents as the third-highest global risk in 2016. The Insurance Information Institute reports that the average cost of a breach in 2016 was $7 million.
Clearly, cyber insurance has become an essential for business owners. However, not every entrepreneur has a healthy understanding of this coverage. What types of protection are available? What policies are appropriate for you? Where are your greatest risks? It’s important for business owners to answer these questions and get the proper coverage.
Following is a breakdown of the most common types of coverage. Familiarity with this terminology will help as you partner with your insurance provider to determine the best coverage for your company.
- Business Interruption: A cyber-attack can limit your ability to continue operations. You may lose a lot of business while you sort things out. This covers loss of income during that time.
- Crisis Management: If a data breach affects customers, you will incur costs to notify consumers and provide credit monitoring services for them. This also covers the cost of public relations/advertising campaigns you must run in order to rebuild your reputation.
- Cyber Extortion: If your network is threatened by blackmailers, this covers the payment of an extortion threat. It also provides coverage for the cost of tracking down the criminals.
- Loss of Data: Cyber-crime often involves sending a virus or other damaging code into your system. Loss of Data or Data Corruption policies cover the destruction of valuable information.
- Criminal Rewards: If a cyber-criminal attacks your systems, you may offer a reward for information leading to the criminal’s arrest. This insurance will cover the cost of that reward.
- Data Breach: If your data is breached, you are legally liable. This covers expenses related to that legal liability.
- Identity Theft: A common cyber-crime is the theft of customer or employee personal information. If this happens, Identity Theft coverage gives you access to an identity theft call center for assistance.
- Directors & Officers Liability: Company leaders may be at risk or liable for decisions made on behalf of the company. With this policy, key decision makers are protected from cyber liability.
- Cyber Liability: This basic coverage protects you from costs such as legal fees and court judgments that you incur after a cyber-attack. It also covers unintentional cyber mishaps by your company or another company, such as transmission of a computer virus.
- General Liability: It’s important to note that most general liability policies do not cover cyber-crimes.
Don’t leave your business vulnerable to these prevalent attacks. To protect your assets, employees, and company future, educate yourself about cyber-crime. Learn your weak spots and speak with your insurance agent about how you can strengthen these areas with the right coverage.