Cyber Liability Insurance: An Essential Coverage in The Internet Age

We now live in an era where we all depend on the internet almost every second of the day. Our businesses have been fully or partially automated, giving us control even if we are thousands of kilometers away from our physical offices. 

Despite all of the good the internet has done to how we conduct business and live, it has opened us to a new dimension of risk. Between January 2005 to May 2020, there have been close to 12,000 recorded cases of breaches. 

According to Cybint, 85% of cybersecurity breaches stem from human errors. It’s also interesting to know that majority of businesses don’t have dedicated personnel to respond to cybersecurity issues. 

You’ll agree that cybersecurity issues have become a daily struggle for businesses globally. This is why companies have to start giving a thought to an extra layer of coverage through Cyber Liability Insurance coverage. 

What is Cyber Liability Insurance? 

With its origins in Errors and Omissions Liability insurance, Cyber Liability Insurance is relatively novel and emerging. It’s a coverage that reduces the financial risks that stem from data breaches, hacking, and all other forms of cyber attacks. 

The intent is to help minimize the negative impact that any compromise, loss, or theft of electronic data could have on a business. Cybersecurity Liability Coverage caters for the following; 

• Legal fees and compensation for privacy violations
• Meeting the extortion demands of the attackers
• Notification of customer of data breaches
• Hiring computer forensics in recovering compromised data
• Recovering altered and stolen data
• Restoring of the PII of the customer after a breach

Who Needs Cyber Liability Insurance? 

There’s hardly any business that doesn’t need cyber insurance coverage. Any business that stores sensitive customer, partner, or client information; and supports online financial transactions require cyber liability coverage. 

Morever, the misconception that cyber attacks are only targeted at Forbes 100 businesses is far from the truth. The attacks on small businesses are on the rise. Fundera reported that 43% of cybersecurity attacks are targeted at Small and Medium Businesses. 

In reality, regardless of the size, the number of employees, or financial base, all businesses are vulnerable.

How To Assess Your Cybersecurity Liability Coverage Needs

There are five key areas you need to consider before determining your cybersecurity insurance coverage; 

1. The proprietary information that your business utilize, store and manage. 
2. The volume of the personal identity information that your business, employees, or its agents collect
3. The mode of collection of the personal information that you utilize
4. How sensitive is the personal data stored? 
5. Lastly, do you employ third parties or vendors in accessing these data? 

Final Thoughts

While cyber liability insurance is still much of uncharted terrain, you should remember that you are leaving yourself exposed on many fronts.

You need to prioritize your information asset and play your cards right. We are here to help you get the correct information. Just ask away.