Cyber Liability: A Real World Example
As technology becomes increasingly important for successful business operations, the value of a strong cyber liability insurance policy continues to grow. The continued rise in the amount of information stored and transferred electronically has resulted in a remarkable increase in the potential exposures facing businesses.
In an age where a stolen laptop or data breach can instantly compromise the personal data of thousands of customers, protecting your business from cyber liability is just as important as some of the more traditional exposures businesses account for in their commercial general liability policies.
Claims Scenario: Outsourcing Gone Wrong
The company: A national construction company that outsources some of its cyber security protections
The challenge: A construction firm partnered with a third-party cloud service provider in order to store customer information. While this service helped the company save on server costs, the third-party firm suffered a data breach.
As a result, the construction firm had to notify 10,000 of its customers and was forced to pay nearly $200,000 in incident investigation costs. The incident was made worse by the fact that the firm did not have a document retention procedure, which complicated the incident response process.
Cyber liability insurance in action: Following a data breach or other cyber event, the right policy can help organizations recoup a number of key costs. Specifically, cyber liability policies often cover investigation and forensics expenses—expenses that can easily bankrupt smaller firms who forgo coverage.
What’s more, when third parties are involved, managing litigation concerns can be a challenge. By using cyber liability insurance, organizations have access to legal professionals well-versed in cyber lawsuits and response.
Learn More About Cyber Liability Insurance
When cyber attacks like data breaches and hacks occur, they can result in devastating damage. Businesses have to deal with business disruptions, lost revenue and litigation. It is important to remember that no organization is immune to the impact of cyber crime. As a result, cyber liability insurance has become an essential component to any risk management program.
Cyber exposures aren’t going away and, in fact, continue to escalate. Businesses need to be prepared in the event that a cyber attack strikes. To learn more about cyber insurance, contact CMB Insurance Brokers today.
Did you know that 60% of small and medium businesses don’t survive after a cyber attack. Protect your business today, call us at 780.424.2727 or click here to get a quote.