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 cybercrime. Cybercrime shot up by almost 300% since the start of the pandemic! Businesses are much more likely to be closed by cybercrime than fires and natural disasters. So, adopt measures to protect your business like having 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.
There are many ways your business can be destroyed. 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.
Download Infographic – What is Cyber Liability Insurance
Why Invest in Cyber Liability Insurance?
These statistics stress why SMBs in particular must have cyber liability insurance:
- ❗ Over 40% of cyberattacks target small businesses.3
- ❗ Over 60% of SMBs have experienced a cyberattack in the past 12 months.4
- ❗ Over 45% of SMBs say that their processes are ineffective at mitigating attacks.4
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:
- 💲 Cost of downtime
- 💲 Cost of investigation
- 💲 Cost of recovering data
- 💲 Cost of legal procedures
- 💲 Cost of notifying stakeholders about the incident
- 💲 Cost of restoring the personal identities of those affected
Cyber liability insurance has 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. Insurers are losing money paying out claims, so they are looking closely at both your business and their policies to reduce their losses.
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The Cyber Liability Insurance Crisis
View the Growing List of Requirements on Businesses
Does your business need Cyber Liability Insurance?
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 protections and liability insurance should be your top priority.
Make sure your cyber liability insurance has the following essential coverages:
Network security and privacy liability
Covers breach response costs like forensic investigations, public relations, credit monitoring, legal fees and fines/penalties
Business interruption losses and extra expenses
Covers lost revenue and added costs to continue business
Digital data recovery and cyber extortion expenses
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
Covers losses from digital theft of money or securities and social engineering fraud
Who Are the Top Cyber Liability Insurance Carriers?
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. Request a Compliance Consultation.
We can help you adopt a Compliance-First Mindset. Set your business up to withstand the threats and make sure you are compliant with your insurance requirements. If you do have an incident, you want to make sure your investment in your insurance will cover your costs.