How Cyber Insurance Helps Your Business Recover From a Breach
Any business that uses technology or collects data is at risk of a cyber attack, and the results can be catastrophic—to your company’s reputation and your customers’ data. Without a dedicated cyber policy, most businesses do not have adequate insurance coverage following a data breach.
Cyber insurance can be essential in helping your company recover after a data breach, with costs that can include:
- business disruption,
- revenue loss,
- equipment damages,
- legal fees,
- public relations expenses,
- forensic analysis and
- costs associated with legally mandated notifications.
Following are some ways that cyber insurance can provide coverage:
Companies are responsible for their online data, no matter where it is stored. Whether it is stored on your property, in an offsite data warehouse or in a third-party technology company cloud, you may be held liable if any personally identifiable information (PII) or protected health information (PHI) gets exposed.
If a breach does occur, a cyber policy can cover breach notifications and remediation expenses, subject to the applicable retention. It also can cover defense expenses such as responding to and cooperating with regulatory investigators.
Today’s mobile workforce means that laptops and other mobile devices often leave the workplace premises and may be stolen or compromised, potentially exposing private or confidential data. While you cannot completely prevent theft or loss, your organization can take steps to protect and limit the amount of data on each device, such as implementing procedures for using effective passwords and mandating periodic changes. Avoid storing any private or confidential data on laptops. Or, if necessary, store only encrypted data or access it via a secure connection to a server.
If a breach does occur, a cyber policy can include Network and Information Security Liability coverage, which provides protection for failure to prevent unauthorized access to, or use of, data containing private or confidential information of others.
The costs for a single lost laptop can include more than just the cost of the device, such as legal costs, investigation and miscellaneous expenses.
Notifying customers of a breach and other post-breach responses, which is mandated by law, can add up.* As part of the a cyber policy, a law firm would serve as counsel and breach coach and help reimburse those costs, subject to the applicable retention. An incident breach response vendor would also be recommended to handle customer notifications, in keeping with state laws when personal information is compromised.
Computer forensics teams can determine the extent of a breach and whether private customer information may have been compromised. A cyber policy would reimburse the insured, subject to applicable retention, for computer forensic experts. The policy also could provide coverage for potential business loss and extra expenses that may occur during the period of business restoration.
Having cyber insurance can help prepare your company to respond effectively in the critical hours and days following a data breach. Don't you think it's time to determine if you need this type of coverage?