The world is progressively going digital. Technological improvements and the recent pandemic have fastened this process. As such, the practice of working remotely will increase, reducing employees' physical risk at work.
Nonetheless, a new type of risk is arising following the present-day teleworking trend. Cyber threats are growing at an exponential rate. They include data breach, data loss, identity theft and security breach (amongst many others).
In light of the coming digitalization of the workplace, it is crucial for business owners to protect their businesses. Data protection against cyber risks has never been so vital and insurance companies are adjusting to this issue.
For many companies, cybersecurity is very problematic. The threat and potential impact of cyber- attacks have grown dramatically.
In the event that the company data is lost, stolen, or damaged due to a security breach, it could be very costly to replace or restore. If your business stores customers' data such as names, addresses, credit card information, banking statements, identification numbers on any type of computer system, then there is a regulatory obligation to keep that data secure.
In this article we will further explore cyber liability solutions that exist to protect your business.
What is a Cyber Liability Coverage?
You can protect your business against the costs associated with data breaches by purchasing a cyber liability policy. This type of insurance offsets your liability in the event of a network security invasion or failure.
Most cyber policies include a first-party and third-party coverage. Such coverages may be included automatically while others are available through added extensions.
Although both types of insurance cover data breaches, the first-party allows you to take action on your own damages while the third-party helps you mitigate claims resulting from a client's loss.
What is a First-Party Cyber Liability Coverage?
This type of coverage is designed to cover emergency response costs, event management costs, notification costs, monitoring costs, and recovery costs affected by any of the following cyber events:
- Data Breach
- Cyber Attack
- Human Error
- Insured’s Systems Disruption
- PCI Non-compliance (Payment Card Industry)
- Electronic Media Claim
What is a Third-Party Coverage?
A third-party coverage is aimed at individuals or business entities in charge of systems in which a cyber-attack occurred. Thus, a third-party coverage protects companies using technological devices and softwares that were attacked.
Third-party cyber coverage insures against legal defence costs and settlement costs resulting from a lawsuit. This may include legal fees (hiring an attorney), consultants and expert witnesses for civil lawsuits brought by customers, business partners or vendors, shareholders, regulatory or administrative agency investigations and prosecutions.
In short, a third-party coverage may cover you from the following risks:
- Regulatory fines and penalties
- Defence costs
- Investigation costs
- PCI penalties (Payment Card Industry)
What is an Automatic Coverage?
An automatic coverage is designed to provide automatic adjustment of sum to match with arising events. Insurance policies usually automatically include the following benefits to the insured:
- New subsidiaries
- Extended trigger period
- Mitigation costs
What is included in optional coverage (added extensions)?
- Outsourced Systems Disruptions - caused or contributed by a negligent act, error or omission of a cloud provider or any of its employees or service providers
- Insured’s Systems Disruption
- Preventive consulting services
- Revamp advice costs arising from a covered cyber-attack
- Network usage fraud
- PCI non-compliance additional costs
BLACAZ and Cyber Liability insurance
Business interruption arising from a breach in a company's cybersecurity is dangerous. On one hand, it should be part of a firm's risk management to protect its customers' personal information. On the other hand, it is wise for a company to reduce its general liability with this type of cyber insurance.
Cyber liability insurance policies help you cover the costs resulting from a cyber threat. Such dangers are rapidly growing and constantly evolving. This is especially the case in our modern economies where the digital is taking over the physical. As such, cyber risks are taking over physical risks that people can be subject to when working in an office for example.
BLACAZ is committed to securing the most competitive and viable insurance option for its members, including cyber liability insurance. It has never been that important to protect your company with adequate cyber liability insurance.
You may contact us today so we can assess your cyber liability needs, provide the best quote for your situation as well as answer all your questions regarding this topic.