Why you need cyber insurance in the new normal

July 15, 2020

As COVID-19 continues to shape the way we live and work – and, four months following nation-wide #StayHome restrictions – it’s a good time to assess your remote business operations, especially from a cybersecurity perspective. COVID-19 has exposed vulnerabilities to enterprises of all sizes as employees work from home on shared networks and IT/security departments grapple with the rapid shift of the workforce to these remote locations. 

A recent report from the FBI states that they are receiving “3,000-4,000 cybercrime complaints per day—up from 1,000 on normal days. The primary targets are work from home employees that are outside of the company firewalls and thereby susceptible to social spear phishing and active persistent threat (APT) campaigns.” (Forbes)

Most cybersecurity experts assert that it’s not a case of if a cyberattack will happen, but when. In the wake of COVID-19, experts believe that ransomware cases are also on the rise, as cybercriminals “go after the really irreplaceable business assets…which means file servers, database services, virtual machines, and cloud environments.” (ZDNet) While there are measures businesses can put in place to protect data, including two-factor authentication, enforcing consistent and regular password updates, and understanding where and how to react to threats as they are identified (which comes from access to education and resources like your employee handbook), being covered for the consequences can help you recover and sustain business. 

What is cyber liability insurance?

The cost of a data breach and the reputational damage to your business after a breach occurs can be devastating. Businesses need a well-designed insurance policy to provide the protection you need and breach management expertise to ensure the breach is managed properly and in accordance with regulatory requirements.

Data breaches occur every day. Hacking incidents are the most recognizable and expensive cause of data loss, and over the last few years have become the most common.

  • 49% of the data breach causes are malicious and criminal attacks.
  • 32% are system glitches, such as software updates, which inadvertently expose sensitive private files.
  • 9% are from people making mistakes, such as losing laptops and flash drives

No matter the sophistication of the security system, there is little that can be done to eliminate the risk of human error. A common, accidental breach is a real business risk worth considering today.

Coverage may include:

  • Third-party liability for financial loss, mental anguish, mental distress, and any breach-related claims
  • First-party coverage for breach-related expenses
  • Full limit coverage for notification, credit monitoring, and computer forensic expense
  • Coverage for breach costs available outside of the policy limit
  • Coverage available for business interruption lost income and restoration of data post-breach
  • PCI fines, penalties and remediation expenses
  • Primary limits available up to 20 million (higher limits available through excess)
  • Retentions starting at $1,000
  • In-house quoting system for risks up to $100 million
  • Notification costs are covered when required by law and on a voluntary basis
  • Free risk management services provided to policyholders

Ready to learn more? Contact our insurance team to discuss your needs and schedule a free consultation.

Consolidated Human Resources (CHR) 

We’re leaders in helping businesses reduce the complexity and risks associated with managing all elements of a company’s payroll, 401K, healthcare, compliance, and insurance needs. For over 25 years, our team has been helping small and mid-size businesses across the globe spend less time dealing with the hassles of HR, and more time growing and building their business. Learn more at www.chrusa.com.