Cyber Liability Insurance – Why you need it now!
Cyber Liability Insurance has been available to all businesses for over a decade. Security breach notification laws were enacted in 2002 in response to an escalating number of breaches of consumer databases containing personally identifiable information. The most recent attack in the news is with the number 2 health insurer in the U.S., Anthem. They disclosed last week that hackers breached its computer system containing data on up to 80 million people.
Currently over 30 insurers provide some form of dedicated coverage, admitted and non-admitted and each is unique; however, less than 1% of all potential buyers have currently purchased this type of coverage.
So why do more businesses not yet have Cyber Liability Insurance?
- Many small business owners are oblivious to the high risk of data breaches
- Many small business owners believe that hackers are likely to attack only high-profile, high-revenue firms.
- The “newsworthiness” of data breaches at larger corporations often overshadows the more frequent security violations that target small businesses.
- It is difficult to determine the risk and costs of a data breach.
- With protected health information (PHI) or personally identifiable information (PII) it is challenging to put a value on it, as compared to say a home or automobile.
- Many industries still do not have a well-developed compliance program to determine the values and risks involved due to a lack of resources. In other words they have a difficult time justifying the expense of compliance until after it is too late.
Cyber Liability Insurance is more affordable than you think. Insurance premiums are typically determined based on revenue and potential size of loss. Data breaches are dependent upon your industry, the type of data you collect, who you share it with and how you protect it. How compliant you are to the regulations can also have a considerable bearing on the amount of potential liability post breach.
Cyber Liability Insurance premiums could be as low as $1,500.00 per year, with minimum deductibles as low as $2,500.00. There are limits available from $500,000 to $50,000,000 and above. The markets, coverage and pricing are constantly evolving in this industry so you would want to discuss with your broker the most cost effective coverage for your particular business. Don’t get caught without this significant risk management in your portfolio. Cyber insurance can make the difference between staying in business or shutting your doors after an attack.
Read more on Cyber Liability Insurance.
Sources: ID Experts, Wikipedia, California Civil Code, Partners Specialty Group-Mark Jarboe
The Armstrong Company Insurance Consultants (License #0440075)