Types of cyber insurance coverage:
Privacy and security liability:
If private employee or customer data is compromised due to faults in your systems or theft by hackers or disgruntled employees, you will be held liable. This coverage protects you from liability exposures associated with this risk.
This coverage generally provides reimbursement for expenses incurred to restore data loss or data corruption and to get your systems back up and running. The policy may also cover expenses for the use of consultants, public relations, and advertising to rebuild your reputation and restore consumer confidence after an incident.
Business interruption, denial of service attack, and lost income:
If your service provider (i.e. web host) has downtime due to a cyber attack, has a glitch, or goes out of business, this coverage will help cover resulting losses you may incur. This can include lost revenue, costs for restoring valuable data, and costs to repair systems.
If you receive a threat of attack on your computer system or website coupled with a demand for money to avert or stop the attack, this is cyber extortion. Coverage for this risk will generally cover the settlement and the cost of hiring a security firm to track down the extortionist.
Media or web content liability:
This coverage protects you from claims of libel, slander, copyright, and trademark infringement for content, slogans, and photos on your website. It also protects you from liability exposures associated with banner ads on your website representing other businesses.
Here are some things you can do on your own to minimize the risk of data loss:
- Back up your data regularly
- Use off-site storage
- Encrypt your data
- Run a virus scan regularly
- Use an uninterruptible power supply (UPS)
- Keep your computer in a safe environment
- Have a recovery plan in place
Data Loss Statistics
- Estimates indicate that as many as 85 percent of U.S. organizations may have been hit by one or more data breaches within the past 12 months.
- Many states require companies to notify all customers if a breach is even suspected; these costs are estimated at up to $30 or more per customer.