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 organization 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.
Why Invest in Cyber Liability Insurance?
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 organizations, particularly small-to-medium-sized organizations must have cyber liability insurance:
Over 40% of cyberattacks target small businesses/organizations.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 organization 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 organization in the short term or, in the worst case, result in permanent closure.
Here are a few expenses that an organization 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
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 organization need it? Any venture with cyber exposure must consider having cyber liability insurance. However, if your organization 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:
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
Cyber liability: Covers claims of lawsuit expenses resulting from breaches in client systems or networks
Media liability: 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
Find the Right Carrier
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.
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.
Let Us Take the Chaos Out of Compliance
Data Networks can help your organization comply with a cyber liability insurance policy that’s trusted by others in your industry. To learn how Managed Compliance from Data Networks helps you demonstrate “due care” with your CLI requirements, contact your Account Executive plus check out our online resources and download the Managed Compliance for CLI fact sheet.
You can trust Managed Compliance from Data Networks to take the chaos out of compliance. Our solution helps you get and stay compliant with global standards such as CMMC, GDPR, HIPAA, NIST CSF, PCI, and manage Cyber Liability Insurance requirements. Even better, you can add additional standards whenever you like. After a small assessment fee for each standard, your monthly management charge covers support for all available standards plus CLI. Managed Compliance is available as an add-on for our existing Managed IT Services customers or as a standalone solution. Remediation services beyond those provided as part of an existing Managed IT Services contract are available and priced separately.