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    What Does Cyber Insurance Cover?

    Posted by Chris Howard on Jun 19, 2021 11:29:05 AM

    In an age when people share just about anything personal online, there are still several bits of information that give us pause before sharing. 

    Entering personal data into web forms, e.g., our account numbers, credit card numbers, driver's license numbers, social security numbers, and even phone numbers often makes us wonder, how secure is this information I'm entering, really?

    We often trust the businesses we share this information with to keep it protected and don't think or know how they protect it. It's not until we read or watch a news story about another data breach affecting thousands and even millions of customers that makes us want to find out more. 

    The truth is, there are nefarious actors and organizations looking not only to access our information stored within business data systems but to score big by causing a major breach, denying online services, paralyzing computer systems, or all of the above. This leads to ramifications for the very organizations they victimize, and ultimately you as the customer. 

    Business owners know they have plenty of challenges from legitimate competition trying to take customers away. If you're a business owner, you certainly don't need the hassle of criminals trying to take you down or disrupt your operations by infiltrating and ruining the trust your customers have when they submit their data to you.

    If you can't prevent those from wanting to cause your business and customers harm, it is a great idea to insure against it. First, it helps to know what kinds of challenges cyber-attacks pose. 

    What are the most common forms of cyber-attacks affecting businesses today? 

    RansomWare

    We usually think of the term ransom in regard to kidnapping. Think of RansomWare as a malevolent software put in place by a hacker which is meant to block access to your computer systems.

    This type of cyber-attack is meant to hold your systems hostage until a payment is made to the hacker. A cyber-attack policy should help provide help with payment, negotiating, and remediation of data in the case a hacker or hacking organization extorts your business by holding your sensitive data hostage.

    Business Income

    If your business income is interrupted by one or more cyber-attacks, it will cause inconvenience for you as the business owner, your employees, vendors, and customers. 

    There are still invoices to issue, bills to pay, payroll to meet, and processes that need to continue. 

    Putting a full pause on the systems wreaks havoc and leads to loss of expected accounts receivable and payable. 

    Just like the coverage for business loss from a peril such as fire, earthquake, or flood that takes business temporarily offline, Cyber Insurance can help to recover the profit that a business could generate over a given time of the outage. This helps to provide income for the business to cover certain costs as if that business didn't suffer the cyber-attack. 

    For this protection to kick in, your business doesn't have to experience a complete shutdown. Even a temporary disruption can trigger this coverage.

    Sensitive Customer Data Breach

    If you own a business that regularly stores personal data, you know the responsibility of keeping that data protected. Some industries are required to protect customer data in such a manner governed by the laws (e.g., HIPAA) that make it a crime to share that data. Education, health, and finance require a higher level of customer data protection.

    If there is a sensitive data breach, your business is exposed to recourse through lawsuits for not adequately protecting sensitive information in addition to the public relations nightmare just created by said breach. 

    As a result, your business may need appropriate coverage to help with the extra effort to inform and retain customers, pursue public relations assistance, and help with credit monitoring for clients. 

    Regulatory Fines

    State and Federal agencies exist to keep businesses, vendors, and customers accountable to each other through data regulations. Step out of line, get the fine. 

    As a responsible business owner, you don't willingly push the envelope on irresponsible business practice knowing regulatory fines could knock down what you've taken care to build. 

    When cyber-attacks bring data-breach trouble to your business doorstep, you still have to deal with the aftermath of data breach laws and regulations. 

    The cost of hiring attorneys and paying fines/penalties can add up over a variety of customers across multiple states. 

    Having a cyber insurance policy that covers these costs will certainly help stabilize the efforts to bring business back up to speed and good standing.

    Don't Wait For the Breach

    An outside breach due to cyber-attacks is a reality for many businesses these days. Multi-national companies to mom-and-pop businesses have felt the burn. 

    Even if you feel secure from the dangers on the outside, there is added risk of cyber breach from inside. Even an employee leaving their laptop unattended at a coffee shop can make your company data susceptible to a breach. 

    At Insurance For Texans, we think about risk all the time. We like to put plans in place to protect against it and remediate it. We are business owners, so there's a great probability that your concerns have and continue to be ours. 

    As a local, independent insurance agency, we have access to a variety of coverages through a variety of providers that specialize in cyber insurance coverage. 

    If you have no idea about where your protection sits against cyber-attacks and the havoc it brings, let's talk about it. 

    Stay protected, Texas.