Take our Cyber Survey
Test your knowledge of cyber liability and determine if your business needs cyber liability insurance.
- Do you know the definition of Cyber Liability Insurance?
- What business types need Cyber Liability Insurance?
- What are the causes of cyber exposure?
- Why does my business need Cyber Liability Insurance?
- What is the financial risk due to cyber exposures?
1. Cyber Liability Insurance Defined
Cyber Liability addresses the first- and third- party risks associated with e-commerce businesses, the Internet, networks and informational assets. Cyber Liability Insurance offers coverage protection for exposures arising out of Internet communications.
The concept of Cyber Liability takes into account first- and third- party risks. The risk category includes data storage, business interruptions, fraud and theft, extortion, crisis management, copyrights, privacy issues, virus transmission, or any other serious trouble that may be passed from first to third parties via the Web.
2. Types of businesses who would need Cyber Liability Insurance
Anyone with a Web site now has the legal liabilities of a publisher, and has a legal responsibility to protect customer privacy information. If your business uses the Internet to conduct business operations through email, e-commerce or pay-pal, web sales, website content; all of these factors are exposed to cyber liability. Every class of business has this exposure/liability. The more hazardous sectors include:
- Educational Institutions
- Financial Institutions
- Public/Governmental Entities
- Law Firms
- Payment Processors
3. Some causes of Cyber Exposure
Below are some common sources of cyber exposure to claims
- Unauthorized access/use of a company’s network
- Denial of Service attacks
- Receipt or transmission of malicious codes (i.e. viruses, malware, spyware)
- Physical theft/loss of hardware (including laptops, mobile devices, iPads, etc)
- Any failure to protect, unintentional release, failure to handle/store confidential information of customers, consumers and employees
4. Why does my business need Cyber Liability Insurance?
There has been a growing number of Internet businesses that have blossomed on the Net over the last decade. This growth has increased the Internet exposure which is not typically covered on a traditional liability product. This is why you need to consider Cyber Liability Insurance when reviewing your company’s insurance needs
5. Financial risks associated with cyber exposure
Below is an example of what your personal data is worth to a hacker.
- Utility bill scanned = $10
- Full identity = $6 to $80
- Gmail user name & password = $80
- Facebook user name & password = $300
- Bank account credentials = $15 to $850
- Credit card with $1,000 available = $25
- Credit card with personal information = $80
Below are a few Cyber Liability claims examples.
- A manufacturer received a call and email from whom they thought was their bank, asking for a verification of funds request. The CFO provided the information and $75,000 was removed from their account. The cyber thief was able to take $75,000 from the manufacturer.
- A restaurant had 200 credit card records stolen. The hacker was able to charge an additional $120,000 from the credit cards. The restaurant incurred notification costs and direct damages costs of over $250,000.
- An employee of an insurance broker lost a laptop while traveling. The laptop contained names, addresses, birth dates and social security numbers for company employees. The company paid for one year of credit report monitoring to affected employees to mitigate future issues. The total cost was $25,000.
- An auto dealership was the target of identity thieves when two men broke into the dealership after hours, stealing files containing financial information from customer transactions including credit reports, bank statements and social security numbers. The thieves were eventually apprehended, but not before making illegal purchases with the stolen identities of dealership customers. The dealership incurred over $102,000 in notification costs.