Privacy & Network Security Insurance: What business owners don’t know about cyber-security
Cyber-liability is a top concern for business owners these days. But while many business owners are aware of the threats, clients still don’t fully understand their risks and necessary coverages. Or, they continue to assume that their current general liability policies will suffice. Here are the top nuances that business owners need to know about Privacy & Network Security Insurance and why it’s necessary to protect their operations.
Internal protections aren’t enough. While an IT department and firewalls are necessary precautions, they are not foolproof. In fact, a large number of data breaches occur due to employee error or is an inside job from a rogue, disgruntled or former employee. The IT department can’t protect against threats with insider access and information. Opening suspicious emails, accidentally downloading malware or losing company phones and laptops can also be a data breach that is outside the scope of your IT department. It is not enough to rely on your tech professionals- you need cyber liability insurance as well to cover potential employee error.
Data breaches are costly. The global average cost for a data breach is $136 per record. In addition to the cost to recover and/or repair the breach, a cyber hack or data lass could harm relationships with clients, vendors and your company’s reputation. It could take months or even years to recover from a data breach, especially if you don’t have the proper insurance coverage in place.
A general liability policy won’t cover you. Most general liability policies don’t cover data breaches. If they do, it most likely won’t be nearly enough to cover the financial costs it would require to comply with regulatory requirements, out-of-pocket legal expenses and other first party expenses. And Business interruption coverage won’t respond to outages due to computer viruses or hackers.
If a third party vendor compromises the information, it is still your fault. Even if you use other third party vendors, business partners or outside business in your daily operations, the customer’s personal information is still your client’s responsibility. Even if a third-party vendor loses it, your client can still be held liable for the data breach.
Privacy & network security insurance is a must for small and large firms to protect against this widespread exposures. PLRisk Advisors’ Privacy & Network Security Insurance coverage is the solution to helping your customers manage and protect against risk. Contact us today for more information. (855) 403-5982.