Understanding your Cyber Liability Risks
Whether you’re a small business owner or CEO of a large corporation, one thing remains the same: you’re always going to have cyber liability risks. Virtually all businesses use information technology in some way. While IT is great for enhancing your business operations, it’s important to understand the cyber liability risks that come with the technology.
What are my cyber liability risks?
Even though computer systems may seem to be hack proof, if you don’t consistently update their software, you run the risk of a customer, employee or professional gaining unauthorized access to your data systems. The costs of response and remediation for the lost, stolen or compromised data can be significant, and your business could be exposed to these expenses:
- Regulatory fines: Businesses and organizations are required by various state and federal regulations to protect their consumers’ data. If a data breach occurs because your business didn’t meet compliance requirements, you could get some hefty fines.
- Liability: As is with any type of breach, you could be liable for costs incurred by customers after a cyber attack.
- System recovery: A cyber attack could hurt more than just your consumers’ data. Repairing or replacing computer systems can force you to shut down operation while the system is down, resulting in additional loses.
- Notification costs: Depending upon what state you’re in, you might be required to let customers know if a breach occurred or even if it is suspected. If you have a large number of customers, the cost can quickly add up.
- Class action lawsuits. Put yourself in the customers’ shoes – if your data and privacy was compromised, you’d want to take legal action. A large-scale data breach can cost you thousands, if not millions in lawsuits.
What does cyber liability insurance cover?
Depending on what type of Business Owners Policy (BOP) you have, certain types of cyber incidents could be covered. To be on the safe side, it’s best to get a stand-alone cyber liability policy to extend coverage. This policy can cover risks such as:
- Identity theft
- Reputation recovery
- Business interruption
- Loss or corruption of data
- Cyber extortion
When it comes to cybersecurity, it’s best to treat it as a “when” instead of “if” it happens situation. It’s easier to prevent cyber attacks from happening than it is to clean up the mess it leaves afterward.
Looking for a cyber liability policy that will help protect your business from harmful data breaches? We can help answer your questions and get your business the policy it needs. Get in touch with us here or call us at 770-637-1734.