Hackers around the world are looking for ways to defraud companies of all sizes. From large corporations with sizable revenue to, what they often think of as easy targets in small companies, these hackers aim to gain access to personal information they can exploit or sell to others. Cybercriminals find value in almost every bit of personal data. That includes bank account information, Social Security numbers, credit card data, and much more. “Why do I need cyber liability insurance as a business owner, then?”
This type of insurance provides ample protection to a business when the company’s data is accessed or sold to others. It’s a critical way companies need to protect sensitive customer data from would-be criminals.
A recent report from McAfee found that global losses from cybercrime topped $1 trillion in 2020. That figure is likely to increase in the coming years. Why is this a concern? One key factor for some of this growth may have been the pandemic itself. With more workers moving to remote working, there was a significant increase in the number of potential risks to sensitive information. With more potential points of attack, companies of all types are now vulnerable to these risks.
What Is Cyber Insurance?
One of the first steps to reduce these risks is to beef up security. However, even with the significant increase in cybersecurity, companies still have a lingering threat to manage. The only way to minimize the damage this type of risk can create is to purchase insurance products capable of shoring up some of that damage. Cyber insurance is a valuable addition to a company’s business insurance policies.
Cyber insurance helps to broaden the coverage businesses have to protect their company from technology-related risks. This includes cyber liability insurance.
What Is Cyber Liability Insurance?
Cyber liability insurance is often recommended for larger companies. It helps to cover the financial losses from a cyberattack, such as when a cybercriminal gains access to employee or customer personal data. It may cover the cost of other technology risks as well. Another component of this liability coverage is helping to protect the company from would-be private investigations and lawsuits targeted at the company after such an attack occurs.
In short, companies with cyber insurance coverage gain protection from claims made against them when those employees’ or customers’ data is accessed, putting them at risk of identity theft. Without cyber insurance coverage, companies may be responsible for any losses incurred by those people.
How Does Cyber Liability Help Protect Your Business?
Any commercial business is at risk for financial loss from a cyber attack. Consider your current liability insurance policy. That policy helps to minimize the loss your company faces from claims made against your business. Cyber liability goes one step further and provides enhanced and more significant coverage for cyber- and tech-related losses that a typical general liability insurance policy may not cover.
In the event such an attack occurs, it may lead to devastating losses for a company, especially one that may be vulnerable to significant loss. Having cyber liability insurance is the key to peace of mind in today’s internet-connected world.
Today, more than ever, it is critical to have insurance products in place to minimize financial loss including from unseen and unpreventable risks such as cyber attacks. Many factors impact a company’s business insurance cost. The cost you pay for this type of insurance may be different than what others pay due to risks and the size of your organization. Yet, the peace of mind that this type of insurance offers is well worth the investment.
