Data Breach Insurance Policy Information
Data Breach Insurance. Cyber attacks have become all too common problem for businesses. What many businesses don't realize is that they may not be insured against these data breaches with their existing insurance.
Your general liability policy does not cover data breaches. You will need a cyber liability insurance policy to protect you from costly and damaging data breaches.
Read on to find out if your business needs specific data breach insurance.
Data breach insurance protects your private information from unauthorized use with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked data breach insurance questions:
- What Is Data Breach Insurance?
- How Much Does Data Breach Insurance Cost?
- Why Do Businesses Need Data Breach Insurance?
- What Does Data Breach Insurance Cover & Pay For?
What Is Data Breach Insurance?
Data breach insurance is a type of insurance coverage that provides financial protection to organizations in the event of a data breach or cyber attack.
This insurance is designed to help organizations recover from the financial losses associated with a data breach, including costs related to customer notification, credit monitoring, public relations, and legal expenses. The coverage may also include reimbursement for losses due to loss of revenue or damage to the organization's reputation.
Data breach insurance is becoming increasingly important as cyber attacks become more frequent and sophisticated, and can help organizations prepare for the financial consequences of a breach.
How Much Does Data Breach Insurance Cost?
The average price of a standard Data Breach Insurance policy for small businesses ranges from $27 to $59 per month based on location, number of customers, coverage needed, data security in place and more.
Why Do Businesses Need Data Breach Insurance?
Many companies mistakenly believe that they are covered by their general liability policy. In many cases this has been shown to not be true. In the recent Sony PlayStation breach it was found that the Sony's liability insurance coverage did not include legal defense costs associated with the breach.
data breach insurance isn't just for traditional technology companies either. Any business that has access to or retains customers private details could be liable for claims resulting from a data breach. There have been numerous cases of stolen laptops containing sensitive customer information which have lead to legal action and fines.
A good data breach insurance policy will cover the associated costs of a cyber attack. This includes the costs involved with notifying the individuals impacted by the breach.
It will include good faith advertising to make sure that the public and specifically those affected are aware of the problem. It should also include the costs involved with legal defines resulting from legal action as part of the breach.
Why Small And Medium Size Business Are Vulnerable To Cyber Attacks
It's not just large businesses that are vulnerable to cyber attacks. Small businesses are in fact much more likely to be targeted that their owners often assume. Small and medium sized business owners often feel that because of their small size that they are unlikely to be targeted.
But it is precisely the small size of the business which makes them an extremely tempting target for hackers. Smaller organizations usually have weaker defenses against a cyber attack because they don't have the same IT support or technology resources.
In much the same way that burglars are more likely to target a building that doesn't have an alarm over one that does. Hackers look for weak targets and unfortunately that often means small and medium sized businesses.
While in the short term it can seem easy to ignore the possibility of a data breach, in the long term such an approach can be ruinous. It's estimated that the average cost of a data breach is $420,000. The medium scale data breach would force many companies out of business, if they are not properly insured with a cyber liability policy.
Providing Fast And Comprehensive Support For Affected Customers
Data breaches can have a long term impact on customers. data breach insurance insurance can help to offset these costs for the business and its customers. Included among this are identity and credit protection for the affected customers.
Being able to provide full support for customers following a data breach is the best way to counter the damage that can be done to a brand following a cyber attack. While it is not possible to turn back the clock to before the cyber attack, being able to help customers recover from the attack, is the best way to limit the damage to the brand.
One of the worst aspects of a cyber attack is the sustained impact it can have on customer's decisions whether to continue to do business with that company. Businesses that are able to respond quickly and responsibility to a data breach are much more likely to retain customer confidence. Providing this support is much easier to do when you are fully covered by a data breach insurance policy.
The Rise Of Cyber Attacks And Data Breaches
In September of 2016 it was announced that more than half a billion Yahoo accounts had been breached. Even worse, the hack had originally occurred in 2014 but wasn't discovered until two years later. Large scale breaches like the Yahoo hack are no longer an infrequent event.
In fact 2016 was a banner year for cyber attacks. SWIFT, LinkedIn, Twitter, MySpace hacks occurred in 2016 each resulting in millions of customers losing their private details.
Here are some other of of the largest data breaches in recent history:
- Adobe Systems
- Dun & Bradstreet
- Home Depot
- JP Morgan Chase
- Neiman Marcus
data breach insurance coverage helps to protect your business from this growing threat.
Data Breach Insurance - The Bottom Line
The number of cyber attacks increases every year. The businesses targeted by hackers range from the largest multinationals to local mom and pop businesses. The cost of these attacks can be devastating, and many businesses are not currently fully protected under their existing general liability policy.
A specific cyber liability insurance policy is the best way to mitigate against the costs that occur following a data breach.
What Does Data Breach Insurance Cover & Pay For?
Here are some examples of data breach claims and how data breach insurance can help pay for the lawsuit:
Unauthorized access to customer data: A company's database containing customer information, such as names, addresses, and credit card numbers, is hacked by a cybercriminal who gains unauthorized access. This leads to a data breach, and affected customers file a lawsuit against the company for failing to protect their data.
Data breach insurance coverage: Data breach insurance can help cover the costs associated with the lawsuit, including legal fees, court costs, and any damages awarded to affected customers.
Employee mishandling of sensitive data: An employee accidentally emails a spreadsheet containing sensitive customer information to the wrong recipient. The recipient, who is not authorized to access the data, misuses it, resulting in a data breach. The affected customers file a lawsuit against the company for the mishandling of their data.
Data breach insurance coverage: Data breach insurance can help cover the costs of defending against the lawsuit, as well as any damages awarded to affected customers.
Ransomware attack: A company's computer systems are infected with ransomware, which encrypts their data and demands a ransom for its release. The company is unable to access their data, leading to a data breach. The company decides not to pay the ransom and notifies affected customers, who file a lawsuit against the company for the data breach.
Data breach insurance coverage: Data breach insurance can help cover the costs of defending against the lawsuit, as well as any damages awarded to affected customers. It can also help cover the costs of recovering data and restoring systems after a ransomware attack.
Insider threat: An employee with authorized access to sensitive customer data intentionally steals and misuses the data for personal gain, resulting in a data breach. The affected customers file a lawsuit against the company for the insider breach.
Data breach insurance coverage: Data breach insurance can help cover the costs of legal defense, damages awarded to affected customers, and any costs associated with investigating and mitigating the insider breach.
Third-party vendor breach: A company's third-party vendor, who has access to their customer data, experiences a data breach due to inadequate security measures. The vendor's breach leads to a data breach in the company's systems, and affected customers file a lawsuit against the company for failing to properly vet and monitor their vendors.
Data breach insurance coverage: Data breach insurance can help cover the costs of legal defense, damages awarded to affected customers, and any costs associated with investigating and mitigating the third-party vendor breach.
It's important to note that coverage and claim processes may vary depending on the specific terms and conditions of a data breach insurance policy. It's crucial to carefully review and understand the policy details to ensure adequate coverage for potential data breach claims. Consulting with an insurance professional or legal expert can also be helpful in navigating data breach insurance claims.
Additional Resources For Information Technology & Internet Insurance
Learn about small business IT technology insurance policies that help protect IT businesses, consultants & subcontractors from the unique risks that small tech businesses face when they work.
- Application Development
- Amazon Seller
- Artificial Intelligence
- Computer Electronic Repair
- Computer Programming
- Computer System / Network Developer
- Cyber Liability
- Data Breach
- eBay Sellers
- Electronic Data Processing
- Electronic Data Processing Equipment
- Internet Business
- Internet Service Provider
- IT Consultant
- Online Store
- Social Media
- Software Developer
- Technology Services
- Website Design
- Specialty Computer
The information technology (IT) industry is constantly evolving and adapting to new technologies and trends. It is a critical component of many businesses and organizations, as it helps them to communicate, store data, and operate efficiently. However, the IT industry also faces unique risks and challenges that can lead to financial losses, legal issues, and damage to reputation. This is why it is essential for IT businesses to have commercial insurance to protect their assets and interests.
One of the main risks that IT businesses face is data breaches and cyber attacks. Hackers can gain access to sensitive information stored on a company's servers or systems, leading to data theft, identity theft, and other crimes. Insurance can provide coverage for these types of events, helping IT companies to mitigate the financial and legal consequences.
Another risk that IT businesses face is the possibility of equipment failure or malfunction. This can result in downtime and lost productivity, which can have a significant impact on a company's bottom line. Commercial insurance can help IT businesses to cover the costs of repairs and replacements, as well as any lost revenue or expenses incurred due to the equipment failure.
IT businesses may also face legal issues, such as intellectual property disputes or contract disputes with clients. Insurance can provide coverage for legal fees and damages, helping IT companies to defend their interests and protect their reputation.
Overall, the IT industry needs business insurance to protect against the many risks and challenges it faces. Without adequate coverage, IT businesses may be vulnerable to financial losses and legal issues that could impact their operations and success.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Computer Fraud, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Errors and Omissions Liability, Professional Liability, Umbrella Liability, Hired and Nonowned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Real Property Legal Liability, Forgery, Cyber Liability, Employment-related Practices Liability, Directors and Officers Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.