You hear a lot of about data breaches and cyber crime these days. Companies such as Target, eBay and Neiman Marcus make headline news because of their massive breaches, as do healthcare organizations and educational institutions. Yet the fact is today all types of businesses large and small are vulnerable to cyber attacks – and the frequency and severity of these breaches is only getting greater.
At Goodrich & Watson, we work with several insurance companies that have developed Cyber Liability insurance policies to address this emerging and costly risk. Policies are available for any type of business that transacts, markets or communicates via the Internet or stores personal or proprietary data of others on a computer system. In addition, there are Cyber insurance programs available for specific niches that have unique exposures, such as healthcare and others.
New research from the Ponemon Institute and IBM reveals that reputation and the loss of customer loyalty does the most damage to the bottom line after a data breach. In the aftermath of a breach, companies find they must spend heavily to regain their brand image and acquire new customers.
If you have a data breach or transmit viruses or malicious code—even by accident, you can be held liable for the costs other parties incur as a result. If a data leak results in the theft of valuable intellectual property, identity theft or reputational harm, you can expect a significant third-party claim for expenses and losses. Also, bear in mind that a data breach can generate a regulatory investigation as well as an internal need for a forensic analysis of your data and systems. These can be very costly. Adding to the financial hardship, you most likely will have to notify all affected parties, seek legal defense, and manage the crisis internally and in the public forum.
Cyber Liability insurance policy is designed to assist with all these costs. Additionally, several of our insurers also offer crisis management services as an enhancement to their Cyber insurance product. A Cyber security option can add coverage for business interruption and other losses you face from an attack that are not covered by standard business property policies.
We look forward to speaking with you about your cyber liability insurance needs. Please give us a call at 757-591-2032 to find out how we can help protect you today and into the future.