What is Cyber Insurance?
Cyber Insurance refers to a specialty insurance product intended to protect businesses from possible financial losses or lawsuits resulting from the failure to secure and protect electronic data or intentional cyber security breaches by hackers and other criminals.
Cyber related risks are generally excluded from the standard Commercial General Liability (CGL) insurance policy and needs to be purchased in addition to a basic liability policy.
Why do I need Cyber Insurance?
Business transactions today are increasingly conducted using electronic technology. Organizations rely on online presence and use e-commerce as a communication and distribution method with customers and suppliers. This trend has turned part or whole of businesses’ assets to electronic data.
While you may adopt cybersecurity measures to protect your business, hackers and criminals are developing new techniques every day to launch cyber attacks attempting to steal the business’s data for illegal financial gains or other purposes. Common cyber attack methods include:
Phishing: Hacker pretends to be a member from a reputable organization to trick employees to take an action, such as clicking on a fake link in an email, opening security access for the hacker.
Ransomwares: Hacker deploys encrypted files preventing the business from accessing its own system, the hacker then demands a payment in exchange for the business to resume control.
Spoofing attacks: A criminal impersonates another user within the organization to attack network hosts and steal information.
The consequences of cyber attacks are not only inconvenient but also very expensive. Cyber insurance offers financial protection to restore your business’ system to ensure continued operation as well as mitigation of costly liability lawsuits.
What can Cyber Insurance Cover?
Cyber insurance coverage ranges from data breach to unauthorized intrusion, interference, computer attacks, wrongful payment and cyber-related litigation.
Some of the highlights include:
Data Compromise Response Expenses: Provides you with the resources to respond to a breach of personal information, such as costs of consultation, forensics and legal review.
Computer Attack: Covers the costs to replace and restore your data. Also includes coverage for loss of income, extra expenses and public relation services.
Misdirect Payment Fraud: Covers your funds that are lost as a result of criminal deception of you or your financial institution to send money to a fraudulent destination.
The above list of examples might not cover other scenarios that are relevant to your business. If you have any questions or need assistance, you can contact one of our insurance specialists by clicking the chat icon or emailing us at [email protected].