Cyber liability

When cyber attacks make a mess, cyber insurance can make all the difference

  There is a cost to cyber liability insurance.

But it might be time to think of cyber coverage as not just a line-item expense, but as a cost-savings measure.

Quite simply, cyber attacks can be very expensive to clean up.

In a recent study of 160 cybersecurity incidents from 2012-2015, cyber risk assessment experts NetDiligence found the median insurance claim was for nearly $77,000, with the “typical” claim landing between $30,000 and $263,000 in value.

The NetDiligence 2015 Cyber Claims Study also found the following:

-- The median expense for legal defense was nearly $75,000.

-- The median expense for “Crisis Services,” including ID and credit monitoring, was about $60,000.

-- A median cyber breach resulted in 2,300 lost records.

-- The median cost per record lost in a cyber breach was $13.

The need for cyber insurance

The numbers above tell a story about cyber crime.

But how does it affect your business?

Quite simply, all businesses possess some sort of employee data. And no matter your business, employee data will be attractive to cyber criminals — hackers looking to make a score on the black market.

Still, hacking can be a hard topic for businesses to grasp. It may even seem outlandish, the idea of some shadowy figures hunched over laptops, diabolically plotting to steal your data.

But the numbers suggest hacking is more than just an abstract threat. To wit: criminal activity was responsible for more cyber insurance claims in NetDiligence’s study than any other cause. Nearly a third of the loss claims stemmed from hacking.

However, cyber risks aren’t just confined to hackers trying to snatch your data. Internal threats can’t be discounted, either, as the NetDiligence study showed. About one-third of claims had some sort of “insider involvement” component, according to the survey. And “rogue employees” were responsible for 11 percent of the cyber claims studied.

Cyber insurance, however, can cover losses inflicted by workers gone rogue. Cyber insurance can also cover the costs related to a breach led by outside threats, including legal fees and ID monitoring. In some ways, cyber insurance can be the firewall behind the firewall for your business.

Let Plexus help.

Every business faces cyber risk. You might not see it, but it is there, and it is here to stay. We’ll give you the clear data you need to make the right decisions, including a detailed, company-specific cost estimate of a breach of your firm’s data. Contact a Plexus client service team member at 847-307-6100 for a consultation, or contact us via the Web. Let's have a conversation.

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Cyber liability insurance is a “must have” on any disaster plan list

  Whether your company is big or small, liability insurance should be part of your disaster plan as cyber attacks continue to happen at an alarming rate in the United States.  

And if your business doesn’t have an insurance expert who knows cyber coverage, you could be caught with your network down.

Computers, tablets, smartphones, smart watches, fitness wearables, even cars are susceptible to hacking. And if you own some or all of these devices for your business, you should have a solid plan for cyber attack, which includes cyber liability insurance. These attacks are usually targeted to gain access to personal information, whether it belongs to your employees or your customers.

Cyber insurance can cover a laundry list of costs incurred while regrouping after a cyber attack, including ID and credit monitoring for customers. It can also help defray any legal costs stemming from an attack. It even can step in if there are public relations-related costs necessitated from a cyber breach.

Businesses thinking about cyber coverage should consider acting sooner than later. The longer a firm has coverage, the better when it comes to being protected against attacks.

Still, cyber coverage can be a complex topic to cover. That’s why hiring a specialized broker or agent who understands the complexity of cyber liability is important. If you work with an insurance professional that doesn’t understand cyber, you may not buy a cyber liability insurance policy — and thus, put your company at greater risk. And even if you buy, you might not understand what you are buying — which is problematic in its own way.

For questions regarding the finer points of cyber liability insurance, contact your Plexus client representative at 847-307-6100 (Chicago). You can also contact us via the Web at plexusgroupe.com. 

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Cyber liability is costing companies more, and cyberattacks are on the rise.

Cyber liability is a major concern for the retail and healthcare services industries, where client data – if compromised or lost – can be a very costly problem. In recent years, there have been an increasing number of costly cyberattacks against large companies, with retailers Target and Home Depot among the breached. However, smaller companies face cyber liability risks as well.Big or small, the financial impact of these online security breaches is staggering, with losses of nearly $10 billion anticipated in 2015, according to Insurance Market Source. The fact remains that virtually all businesses use information technology (IT) in some way — to communicate via email, to provide a service, to make a transaction, to store a consumer’s personal data and more. The trouble is that the Internet was built for connecting and speed, not for security. As more and more services and personal information move online, it opens up more opportunities to be targeted by hackers, who constantly scan the Internet for potential openings. How do you stay cyber safe? One example is the EMV technology used by credit card companies. Having data on multiple servers is sound, too. Data encryption is vital, as well as having secure authentication processes, perhaps involving multiple steps. And proving you are taking the cyber threat seriously and have the proper controls in place can give you more than peace of mind— it can help you get covered by an insurer and get a more favorable rate to boot.

For manufacturers, cyber attacks and the cyber liability they can create is a big concern, too, but it’s a different one than for retailers. One manufacturing cyber risk, for instance, is someone hacking into the software of the machinery and take over the machines. Via The New York Times, cyber attacks on industrial control systems increased by more than 300 percent from January 2013 to January 2014, according to data from Dell Security, with the United States a major center for these breaches. With cyber attacks costing retailers, health care companies and manufacturers significant losses related to their size, many are taking greater security measures to prevent the cyber liability fallout from crippling their firms. Even the U.S. Senate is taking up the charge, passing the Cybersecurity Information Sharing Act of 2015 in late October.

 

Want to learn more about insurance solutions to help promote cyber security in the face of a world where cyber attacks lurk? Contact The Plexus Groupe at 847-307-6100 (Chicago), 972-770-5010 (Dallas) or 405-241-9462 (Oklahoma City). You can also reach us on the Web at plexusgroupe.com.

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References

“3 Ways CHIP/EMV Technology Can Affect Cyber Liability.” Insurance Market Source, July 16. 2015.

Pelroth, Nicole. “Online Attacks on Infrastructure Are Increasing at a Worrying Pace.” The New York Times, October 14, 2015.