Cyber Liability

There is growing evidence that almost every business should be concerned about online threats. There are smart steps companies can take to reduce the risk of online attacks and there are a variety of insurance options that can help. Consider recent research regarding online threats to American business:

• A survey by Chubb Group of Insurance Companies found that 65 percent of public companies go without cyber insurance – even though they identify cyber risks as their number one concern.

• A study by cyber security firm ClickCloud recently presented as testimony before a U.S. House committee found that 75% of small companies think their companies are safe from hackers despite the evidence that 20% of attacks strike companies with 250 or less employees and 60% of those companies went out of business within 6 months.

• In 2005, less than one-third of businesses surveyed by the FBI had cyber liability or insurance for cyber fraud in place, today more than 60% of businesses have some form of cyber liability insurance in place, according to an article, Cyber Liability Coverage: Protection Against Network & Data Breaches by Gregory Boop published in About.com.

Cyber liability coverage covers unauthorized use of, or unauthorized access to, electronic data or software and can also provide coverage for liability claims for spreading a virus or malicious code, computer theft, extortion, or any unintentional act, mistake, error, or omission made by your employees while performing their job.

Cyber Liability policies can be customized to meet the needs of the business. An e-commerce retailer will have different needs than a brick and mortar retailer with a limited online presence. Factors that can impact coverage include the business size, number of customers, types of data stored (credit car information, medical records, and financial documents can involve additional risk) and security systems in place will impact the cost of the premium.

Insurance companies often require detailed information on security systems, including technology, software and employee training. Issues that may be considered as part of this review include:

• What security steps are in place when secure portions of your site are accessed?

• Do all company computers utilize anti-virus software, firewalls, virtual private networks and secure mobile technologies to secure network access for all device types?

• Are secure passwords validated?

• Does the IT department regularly review hardware, software and individual site vulnerabilities?

• Is there a written IT security policy that spells out rules for physical security, account management, backup and recovery?

To learn more about Cyber Risk Insurance and steps you can take to protect your company, contact Golden Global Insurance at 305-899-5125 today.