Here’s why you should purchase cyber liability insurance:
You Can’t Afford a Lack of Protection
A single cyber incident can cost your organizations millions of dollars in recovery expenses, business interruption costs and legal fees, which – without an insurance policy in place – could cause financial devastation.
Cyber Attacks are Common
Don’t assume that cyber incidents are a rare occurrence. According to the Verizon 2020 Data Breach Investigations Report (DBIR), 28% of cyber-attacks target small businesses. As cyber criminals become increasingly sophisticated and organizations continue to digitize key business operations, data breaches have become a top threat – making cyber insurance all the more critical.
Coverage is a Contractual Requirement
Many clients, vendors and suppliers include cyber insurance as a requirement in contractual agreements. In other words, securing cyber insurance is crucial to maintain your supply chain and ensure solid customer relationships.
Noncompliance Can be Costly
In the event that you violate state, federal, or international data protection laws, the associated fines or penalties can be astronomical. In California, for example, the maximum penalty for intentional violations of the CCPA is $7,500. Other violations lacking intent are subject to the preset $2,500 maximum fine.
So, now that we’ve established why you need cyber liability insurance. The next question is . . . What does cyber insurance cover?
- First-party coverage – Offers protection for any losses your organization directly incurs from a cyber incident, including:
- The cost of replacing or restoring any lost, stolen or damaged electronic data
- Income losses and extra expenses that result from disrupted business operations
- Ransom payments from a cyber extortion incident
- Reputation preservation expenses (e.g., any public relations efforts following a cyber incident)
- Third-party coverage – Provides protection for claims made or legal action taken against your organization, including:
- Claims regarding negligent acts, errors or omissions that caused a cyber incident
- Legal investigation and defense costs that result from a cyber incident
- Regulatory fines or penalties due to noncompliance with data protection laws
Don’t let your organization suffer the cost of a data breach or cyber incident. Get a quote today from HRO Resources.