How Your Business Runs IT Could Have Serious Insurance Coverage implications!
That’s why one of the fastest-growing categories in insurance is cyber liability. Cyber liability covers the massive costs associated with a breach, which may include the following, depending on your policy:
- Legal fees to handle any number of lawsuits, including class action litigation against your organization, as well as fines and penalties incurred by a regulatory investigation by government and law enforcement agencies.
- Negotiation and payment of a ransomware demand.
- Data restoration and emergency IT fees to recover your network and get it operational again.
- Customer notifications and credit and identity theft monitoring for clients and employees.
- Public relations expertise and call center costs for taking inbound calls and questions.
- Loss of revenue related to being unable to transact; if your operations and data are frozen, you might not be able to process sales and deliver goods and services for days or weeks.
- Errors and omissions to cover liability related to a failure to perform and deliver services to customers, as well as allegations of negligence in protecting your customers’ data.
But here’s what you need to know: In order to get coverage, businesses are required by insurance companies to implement much more robust and comprehensive cyberprotections. Obviously, the insurers want the companies they are underwriting to reduce the chances and the overall financial impact of a devastating cyber-attack so they don’t have to pay out – and this is where you need to pay attention.
MANY business owners are signing (verifying) that they DO have such policies and protections in place, such as 2FA, a strength of password requirement, employee awareness training and data recovery and backups, but aren’t actually implementing them, because they assume their IT company or person knows this and is doing what is outlined in the policy. Not so in many cases.
Unless cyber security is your area of expertise, it’s very easy for you to misrepresent and make false statements in the application for insurance, which can lead to your being denied coverage in the event of an attack and having your policy rescinded.
If you have cyber liability or similar insurance policies in place, I urge you to revisit the application you completed with your IT person or company to make absolutely certain they are doing everything you represented and affirmed you are doing. Your insurance agent or broker should be willing to assist you with this process since your IT company or person cannot be expected to be insurance professionals who know how to interpret the legal requirements outlined.
If you have ANY concerns over this – including whether or not you need coverage, whether your coverage is sufficient and whether you are doing what you need to do to avoid an insurance denial, click here to schedule a quick consultation to discuss your current situation and to receive a referral to a cyber insurance expert we recommend.
Further, if you would like us to conduct a FREE cyber security risk assessment to show just how secure and prepared you are for ransomware or a cyber-attack, we can discuss that too! Just click here to schedule a phone consultation.
