The COVID-19 pandemic has impacted everyone in one way or another. If there is one category that most benefited from the pandemic, it’s cybercriminals. That’s why cybercrime has shot up by almost 300% since the start of the pandemic1 and that’s why you must adopt necessary measures to protect your business from malicious cyber players. One of these measures is to have Cyber Liability Insurance (CLI).
Cyber Liability Insurance (CLI) covers the financial loss that results from cyber events such as data breaches. However, cyber liability is not typically included within general liability insurance and must be purchased separately. Also, each company offering a policy has different coverage options available and exclusions included.
Experts estimate that the damage inflicted by cybercrimes will add up to about $6 trillion globally in 2021.2 That’s higher than the GDP of the world’s third-largest economy, Japan, which sits at $5.38 trillion.
These statistics stress why SMBs in particular must have cyber liability insurance:
Having cyber liability insurance could be the difference between your business sinking or staying afloat after a security incident. Without cyber liability insurance, the various expenses you might have to bear after an incident could financially harm your business in the short term or, in the worst case, result in permanent closure.
Here are a few expenses that a business would have to manage following a severe data breach incident:
Good cyber liability insurance would usually cover these expenses. But always remember that before you commit to a policy, you must get clarity from your insurer about what they do and do not cover.
Does your business need it? Any venture with cyber exposure must consider having cyber liability insurance. However, if your business handles or stores sensitive information online, such as electronic protected health information (ePHI) or personally identifiable information (PII), cyber liability insurance should be your top priority.
Make sure your cyber liability insurance has the following essential coverages:
Covers breach response costs like forensic investigations, public relations, credit monitoring, legal fees and fines/penalties
Covers lost revenue and added costs to continue business
Covers losses such as ransom paid due to ransomware
Covers claims of lawsuit expenses resulting from breaches in client systems or networks
Covers claims of libel, copyright/trademark infringement, etc., resulting from media use
Finding the right cyber liability insurance provider is not easy. While most general insurance providers offer general liability coverage, they don’t always offer comprehensive cyber liability coverage. It is always ideal to choose an insurance provider rated ‘A’ or higher by the most reputable insurance rating agency.
The following insurance carriers are worth considering:
But remember, just committing to a policy is not enough. You will also have to track/measure compliance with the agreement to make sure your contract is always valid, and will therefore, pay out in the event of an issue.
Having the right partner by your side simplifies this process. Whether you are looking to find a cyber liability insurance policy that is right for your business or trying to find and measure your policy’s compliance with cyber liability insurance contracts, we are here to help.
Article curated and used by permission.