A misplaced laptop or hacked account can instantly compromise the personal data of your customers. An ill-advised post on social media could be seen by thousands within minutes, or a system failure could result in lost crucial business data.
As your company stores or transfers more and more information electronically, your risk increases dramatically. Protecting yourself with cyber liability insurance is essential as we rely more heavily on computers and the internet for everyday business.
Why Do You Need Cyber Liability Insurance?
Typical business insurance policies generally do not provide coverage for cyber risks. Exposures to risk ranging from your website content to data about your clients. By adding a cyber liability policy to your risk management portfolio, you can be covered in case of the following events:
- Data breaches – Government regulations are putting more responsibility on companies to protect their clients’ personal data. If that data is compromised, it is now required by law that those affected must be notified. Security changes, identity theft protection and possible legal action are all expensive and damaging to a company. You don’t even have to transmit personal data over the internet, if it is stored electronically, you are still at risk of breaches such as unauthorized employee access or hardware theft.
- Intellectual property rights – Your company’s website, blogs, social media and other internet posts expose you to more than just libel, copyright or trademark infringement, or defamation.
- Damages to a third-party system – You could be held liable for the damages if your company is responsible for someone else’s system failures if you transmit a virus to them via email or if your company provides software that causes damage to others.
- System failure – While the physical damages to your system hardware would be covered under you existing business liability policy, data or code loss due to a catastrophic incident would not be.
- Cyber extortion – Hackers can hijack websites, networks and stored data, and demand money to restore your systems. This can cause a temporary loss of revenue plus generate costs associated with paying the hacker’s demands or rebuilding if damage is done.
- Business interruption – From a server failure to a data breach, incidents can affect your day-to-day operations. You could lose business revenue and direct time and resources towards the problem, which would result in further losses. Denial of service attacks by hackers are increasing and these attacks block access to certain websites by ether rerouting traffic to a different site or overloading an organizations server.
Cyber liability insurance is specifically designed to address the risks that come with using modern technology; risks that other types of business liability coverage simply won’t. The level of coverage your business needs is based on your individual operations and can vary depending on your range of exposure. It is important to work with a broker that can identify your areas of risk so a policy can be tailored to fit your unique situation.
ERM Insurance Brokers, Your Business Insurance Expert in Orange County
As we all rely more heavily on technology new risks continue to emerge. As your business grows, make sure your cyber liability coverage grows with it. Orange County is a hub of technological growth. ERM Insurance Brokers is here to help you analyze your needs and make the right coverage decisions to protect your operations from unnecessary risk. Call us at (949) 222-0444
ERM is located in Irvine, California and provides business insurance to companies in the Orange County, Los Angeles and San Diego areas.