Cyber attacks and data breaches can have a serious impact on businesses of all sizes, in every sector. If you use computers, you could be at risk for a cyber attack or data breach, so it’s extremely important that you carry cyber liability insurance to protect your business, your employees, and your clients.
What Is A “Cyber Attack”?
A cyber attack is any attempt to steal or damage your data. Hackers find vulnerabilities in a computer system’s defenses and bypass them. They may install ‘malware’ – software designed to damage data, or engage in ‘Phishing’ – a common way to gain access to a system by obtaining personal information under false pretenses. Phishing emails come in all forms, even from email addresses that may look familiar at first glance.
What Is A “Data Breach”?
Cyber attacks can lead to data breaches – where large amounts of information are leaked, and used by criminals to commit financial fraud. Data such as personal information of clients, employees, the business, or credit card details, purchase histories, and names and addresses can all be used to commit identity theft. These incidents have become increasingly common.
The Scope Of Cyber Crime
Cyber security is a growing concern for businesses of all sizes as cyber hackers use increasingly sophisticated tactics to disrupt organizations. The use of malware increased by 358% through 2020, and ransomware usage increased by 435% compared to the previous year. The ongoing COVID-19 pandemic has also had a major impact on cyber security. Since the start of the pandemic, there has been a 300% increase in reported cyber crimes in the United States. Google revealed it was blocking more than 18 million malware and phishing emails related to COVID-19 every day.
Approximately 143 million consumers were affected by an attack on Equifax in 2017, which ended up costing the business more than $4 billion. The organization was found liable for the breach and fined $425 million by the Federal Trade Commission.
The Cost Of Cyber Crime
Businesses can be held liable in the event of a cyber attack that breaches privacy or causes damage to their clients or third parties. This includes costs incurred by victims of the attack or breach, system recovery, notification expenses, fines, and lawsuits. These incidents can be costly without cyber liability insurance. The average cost of a data breach rose from an average of US$3.86 million in 2018, to US$4.24 million in 2021. It’s estimated that small businesses make up 84% of all data breaches.
Protection From Cyber Crime
A cyber incident can cause severe financial stress to a business, and expenses related to recovering data, loss of income, reputational damage, and lawsuits can be very high. Most traditional commercial insurance policies are crafted to protect physical assets, not virtual property such as data or software. Cyber liability insurance policies help to mitigate the financial loss experienced by the business that result from cyber events such as data breaches and cyber attacks. This can include:
- Financial loss
- Business interruption
- Loss or corruption of data
- Identity theft
- Cyber extortion
- Reputation recovery
- Legal expense coverage
Cyber liability insurance coverage can vary and, like technology, it is ever evolving. Our team of cyber liability insurance experts will work with you to help identify the best cyber liability insurance coverage that will best protect you if your data or network infrastructure is compromised. Current trends have moved his coverage from optional to crucial. Don’t wait!