Cyber Risk Management
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Cyber Risk Management

Cyber Liability Insurance

 

NUMEROUS RISKS OF A CYBER ATTACK

  • Identity theft
  • Business interruption
  • Damage to reputation
  • Data repair costs
  • Theft of customer lists or trade secrets
  • Hardware and software repair costs
  • Credit monitoring services for impacted consumers
  • Litigation costs

CYBERSECURITY INSURANCE BASICS: 

  • Cyber security damage insurance covers material damages that the company and its employees suffer in the event of a breach
  • Cyber security liability insurance covers expenses incurred when action needs to be taken to solve the breach and deal with the fallout from affected customers and parties
  • Cyber security insurance is a necessary component to dealing with financial, material, and reputation damage that a cyber breach causes
  • The services provided usually include monetary payments and access to advisers that can help start to repair damages to reputation and customers
  • While comprehensive cyber insurance doesn’t really have an alternative, payment card vendors may provide some insurance in the event of a breach

WHAT DOES CYBER INSURANCE COVER?

  • Cyber insurance generally covers your business’ liability for a data breach involving sensitive customer information, such as social security numbers, credit card numbers, account numbers, driver’s license numbers, and health records
  • Besides legal fees and expenses, cyber insurance typically helps with: notifying customers about a data breach, restoring personal identities of affected customers, recovering compromised data, and repairing damaged computer systems

BENEFITS OF CYBERSECURITY INSURANCE PLAN:

  • Traditional commercial general liability and property insurance policies typically exclude cyber risks from their terms
  • Covers costs arising from data destruction and/or theft, extortion demands, hacking, denial of service attacks, crisis management activity related to data breaches, and legal claims for defamation, fraud, and privacy violations
  • Few cyber security insurance policies, however, provides businesses with coverage for an area of growing private and public concern: the physical damage and bodily harm that could result from a successful cyber attack against critical infrastructure

HOW TO APPROACH CYBER LIABILITY:

  • First-party insurance typically covers damage to digital assets, business interruptions and, sometimes, reputational harm
  • Third-party insurance covers liability and the costs of forensic investigations, customer notification, credit monitoring, public relations, legal defense, compensation, and regulatory fines
  • The best approach is to identify and secure the company’s digital crown jewels, then quantify and insure the remaining risk
  • Investigate what risks are covered by existing insurance packages, because there may be overlaps with a cyber insurance policy
  • Cybersecurity insurance doesn’t do a good job of covering intellectual property theft or the reputational damage and business downturn that can be caused by a security breach