Cyber Coverage Insights

Yes. Hackers use technology to scan the Internet for businesses with weak defenses regardless of the size of the business.

A recent Verizon report notes that 43% of all cyber attacks are against small businesses. Worse, 63% of small businesses had experienced a breach in the last 12 months. Any business with a computer and an internet connection is at risk – even if you don’t sell anything on your website.

First-party coverage – Covers damages a business sustains directly from a cyber breach. This can include things like investigative services costs, business interruption coverage and data recovery.

Third-party coverage – Covers damages if a business’ customers or partners are affected by a cyber attack and seeking to hold the insured liable for those damages. This can include legal fees, settlement costs, security failures and media liabilities.

Cyber crime – Covers damage due to any type of criminal activity that occurs using digital means. Examples of cybercrime are extortion/ ransomware, phishing, social engineering, and wire transfer fraud.

Many general business policies only partially cover damage from cyber events, if at all. As mentioned above cyber coverage provides significantly greater protection against the potential damages, expenses, and lost business that can result from a cyber attack.

To be best protected, you want to consider obtaining all levels of available coverage: first-party, third-party, and cyber crime. Further, since some cyber events can result in large expenses, it is important to confirm you have adequate sublimits for each of three above coverages.

If your company gets hacked, you will need a breach coach to get your business back up and running fast. When a breach occurs, you need to assess and contain the damage, notify affected parties (e.g. customers and vendors), evaluate and act on the legal ramifications from agitated customers to regulatory bodies, and more. A breach coach will quickly assemble the right response team to deal with these issues. Without an expert it all falls on you, costing you time and money while adversely affecting your business. Fortunately, most insurance companies now provide a breach coach as part of a greater suite of services when you purchase stand-alone cyber insurance coverage.

Being properly protected definitely helps. However, there is no way to fully protect against new threats or human error. Hackers are always adapting to overcome cyber defenses with new versions of current threats or creating brand new methods of attacking businesses. However damaging a new threat can be, the single biggest contributor to a breach is human error. Easy-to-hack passwords, phishing emails, or even a lost laptop all present potential entry points for a cyber criminal. Finally, a third-party vendor could be attacked impacting your ability to do business. A thorough cyber insurance policy is part of your overall risk management plan to ensure your business runs smoothly.