Cyber liability insurance is insurance coverage that protects individuals and businesses from cybercrime, data breaches, and internet fraud.
Who Needs Cyber Liability Insurance?
Nearly every business owner needs cyber insurance, and small business owners especially need to ensure they are covered.
Around 50% of confirmed data breaches are targeting small businesses. This type of breach can be crippling for a small business, and 60% of small businesses fail within six months of a breach.
It’s important to remember that you are legally obligated to protect any information you collect. Even if you don’t believe your business deals with sensitive data, you probably do store or collect it.
Sensitive data can include any personally identifiable information. That includes but is not limited to credit card or banking information, employee information, driver’s license numbers, social security numbers, or health information. Most businesses store at least one of these items, which means you are legally responsible for protecting the data you collect.
What if We Don’t Take Customers’ Credit Card Information?
You still need to be protected. If you bank online or pay vendors with ACH or wire, then you could be at risk for a breach. This is called social engineering fraud. Some cybercriminals send business owners seemingly legitimate instructions for a bank transfer when in reality they are gaining access to your information and funds.
If you use your computer for email and online browsing as well as work activities, then your computer could be at risk. Criminals can use ransomware to lock your computer through an email or website, and they frequently hold your data ransom until you pay.
Cyber insurance helps you recover financially from any lost files, lost income, and the cost of ransom. It is an indispensable line of defense for businesses.
Cyber Insurance Covers:
- The cost of recovery after a data breach
- Theft of funds electronically or through fraudulent instructions
- Cost of ransom if your computer is encrypted
- Business interruption if your computer systems are damaged due to an attack
- Civil proceedings or investigations as a result of a breach
- Crisis management expenses
Are Any Businesses Excluded From Coverage?
Banks, credit unions, payment processors, gambling organizations, online adult industry businesses, social media or networking firms, cloud providers, federal and state government agencies, municipalities, franchises, crypto-currency companies, and marijuana dispensaries may be exempt from coverage and they may need a specialty plan.
Talk to your insurance agent if you are in one of these industries and looking for cyber insurance coverage.
Examples of Cyber Liability Insurance Claims
It’s easy to see why you need health insurance or car insurance, but it can be tougher to see why you need cyber insurance. Here are a few examples of security breaches in small businesses that cyber insurance would cover:
- A small online clothing company had a computer infected with malware that gave hackers access to their accounting software and customer files. Those files include credit card information, customer names, and customer addresses for 15,000 customers and the hackers wanted $5,000 in ransom. The business had to pay the $5,000 in ransom.
- A salesperson for a consulting firm had a laptop stolen while at a work conference. This laptop had access to personal client information and even though the laptop had a password on it, the information was not encrypted and could have been accessed. The situation cost the firm over $20,000 to cover forensics and notification expenses.
- A restaurant is a victim of social engineering fraud and wires $40,000 to cybercriminals after receiving fraudulent instructions.
AMS Insurance Cyber Liability Plans
We have multiple cyber liability insurance plans available with varying levels of coverage. You can work with your insurance agent to find the right coverage at the right price. At AMS Insurance we are insurance brokers, which means we can shop around from different insurance companies for the best deal. We are licensed in Nevada, California, Utah, Arizona, Oregon, and Idaho.