Digital communication is inescapable. Businesses regularly communicate electronically and sometimes that includes sharing sensitive documents or storing highly confidential financial information on electronic devices and cloud servers. For companies, this can easily become risky business if proper measures aren’t taken to protect data from a security breach beforehand.
From hackers to social engineering schemes to even human error—such as misplacing a company laptop connected to a server—data security breaches are more common that we like to think. In fact, Symantec’s 2016 Internet Security Threat Report found that:
- There were over one million web attacks against people each day in 2015.
- Spear-phishing campaigns targeting employees increased 55 percent in 2015.
- Ransomware increased 35 percent in 2015.
The good news is that even if proprietary information lands in the wrong hands, your business can be covered through CyberRisk coverage including liability insuring agreements and first party insuring agreements.
Liability insurance agreements respond when the private information of vendors or customers is breached, resulting in fines or lawsuits. They provide protection in three different areas. The first is network and information security liability, which covers claims arising from unauthorized access to identity information, failure to provide notification of data breach (if required by law), transmission of computer viruses, and liability for not providing authorized users with access to the company’s website. Secondly, communications and media liability covers claims of copyright infringement, plagiarism, defamation, libel, and slander in electronic content. Lastly, liability insurance agreements can also cover regulatory defense expenses arising from governmental claims of network and information security.
First party insuring agreements are another important option for business owners to carefully consider. These agreements cover costs incurred by your business during a crisis or data breach. They respond in four different areas including crisis management event expenses, which covers public relations services to mitigate negative publicity as a result of cyber liability. The policy can also cover security breach remediation and notification expenses, computer program and electronic data restoration expenses, e-commerce extortion as well as business interruption and additional expenses.
If your business isn’t covered for data security breaches or if you’re unsure of what your policy covers, contact us to speak with one of our agents.
Cyberrisk Coverage Highlights. 1st ed. Travelers Insurance, 2016. Print.