What every e-business needs to know about data breaches
In the past, the crime was pretty simple. Today’s thieves do not need horses or escape cars, as their crimes often take place online. And it’s not just money they’re looking for. The loot sought by cyber criminals is often personal identifiable information (PII) or sensitive data, including …
Credit card numbers
Social security numbers.
Due to the increase in cybercrime, having online insurance policies or insurance online, such as liability insurance, is a way for a company to protect itself.
How your IT business is vulnerable to cyberattacks
Now that businesses are more likely to be attacked by an online criminal, an internet insurance solution like Cyber Liability could be the most valuable policy in your computer business insurance arsenal.
Liability insurance can cover losses for cyber incidents, including …
Interruption of work.
Damage to the network.
Bob Zeglarski (@BizLawyer), Founder of Cutwater Law, PLLC (@CutwaterLaw) says that most Cyber Liability policies cover “the destruction of data, or if your data is stolen, if you are hacked, if there is extortion; denial of service attacks; and the crisis management activity that you must implement as part of the privacy breach. ”
As a small IT company, you never know when …
A bored 15-year-old hacker can destroy your website or servers just for fun.
This new trainee you hired could unintentionally open an e-mail containing malware, which would result in the installation of ransomware on your network.
You could be the target of a rival IT company that intends to access your files and flush out your customer list.
These types of issues are known as first-party data breaches, which means that your business is the one affected by the breach. If your systems are hacked or you experience a data breach, a first-party liability insurance policy can help you pay for the following:
Security incident investigation.
Anti-fraud protection for customers.
“The reason why liability insurance policies are so often recommended is that they aim to cover the costs of the first part, including the investigation and the cost of forensics,” says Brian Dusek (@brianjdusek), partner at McCullough, Campbell & Lane LLP. “These costs can be very important because it’s very focused on the details.”
While it’s important to protect your business by using a Cyber First Party liability policy, most IT companies are far more likely to be impacted by a third-party breach involving hacking data. a customer.
When a customer is hacked, third-party liability insurance can help
Whenever you are responsible for protecting customer data, you are vulnerable to a third-party cyber-suit. Dusek says that three industries are the most frequently targeted by thieves:
“IT companies need to look who they are for, where customers are doing business, and what risks their customers are facing,” says Dusek.
Suppose your IT company was hired by a public accounting firm to create a portal for their system. Due to an error while creating the portal, a data breach occurs.
“So, let’s say that this firm has 1000 customers in 50 states, and suddenly the information of 1000 people in 50 states is violated,” says Nace Naumoski (@nacenaumoski), a partner at Stewart Bernstiel Rebar & Smith (@SBRSLawyers). “A data breach like this, it could cost hundreds of thousands of dollars to mitigate and would likely put a small IT company out of business.”
If your business is sued by a customer for a data breach, third party liability insurance can help you pay for:
The lawyer’s fees.
Settlement costs or damages.
Other court costs
It is possible that your professional liability insurance is already covered by liability insurance, but as each policy is different, it is always better to ask your insurance agent to recheck.
Why Data Breaches Are Public Enemy No. 1 for Retail Businesses
Retail businesses are a prime target for cyber-thieves because of the high volume of credit card information they collect and store. While data breaches like those suffered by Target and The Home Depot are the ones we observe the most, the majority of data breaches actually affect small businesses.
Naumoski says data breaches among retail giants give small businesses a false sense of security. “In fact, the vast majority of our customers in the field of data breach are mid-sized to small businesses,” he says.
If you have customers running physical stores or even an online store, you might be in the hot seat if you work on everything related to storing and protecting customer information, including …
Credit card numbers
To find out how much Cyber Liability coverage your business might need, read “How Much Cyber Liability Insurance Is Enough?”