Cybersecurity and Cyber Insurance
Cybersecurity and data breaches are a big topic in the news today. A notable recent breach was from Capital One, where over 100 million customers had their data compromised. Not too long ago, a Facebook breach affected 50 million accounts. These cyber breaches are becoming more frequent, and the attacks are more sophisticated.
Hackers are often opportunists, exploiting a vulnerability in a security system. This was the case for Capital One when supposedly a software engineer discovered a way to access the server. More often, though, hackers use phishing methods to target individuals and businesses specifically. You can read more about phishing and other types of hacker attempts on our Guide to Cyber Security and Phishing Attacks.
Phishing attempts are incredibly frequent. We’ve seen many attempts of spear-phishing at our agency. An email will be extremely persuasive at first glance, seemingly coming from the proper email. But once you view the sender details, you will notice a discrepancy. We typically see an email pretending to be an executive at the company, asking a staff member to comply with a request, usually to transfer funds or perform another action. Luckily, we have safety measures in place to avoid that.
Unfortunately, even clicking on a link from a fraudulent email can have devastating effects. You can read about trojans and other malware on the Phishing Attacks: Guide to Cyber Security. Also, in this guide, we’ve listed many precautions you can take as an individual or business, and we recommend implementing every one. Better safe than sorry when it comes to you and your company’s data.
Many businesses have also turned to Cyber Insurance to help protect their company if they do become compromised from a cyber attack. Of course, as an insurance agency, we promote this product and would like to be transparent in doing so. Even if you don’t have insurance through us, we encourage you to gain a comprehensive understanding of what you are buying.
It’s nearly impossible to calculate the damages and losses from a data breach accurately. The 2019 Cost of Data Breach Report states that the average total cost of a data breach is $3.92 Million. Even a fraction of this amount is enough to bankrupt a small business. It is expected that the recent Capital One breach will cost between $100 Million to $150 Million, and the company has a $400 Million cyber insurance policy in place.
Capital One said it expects the incremental costs of the incident to be $100 million to $150 million, mostly expenses tied to providing credit monitoring and legal support. The company has a cyber-risk insurance policy with a $10 million deductible for $400 million in coverage.
If you have a BOP (Business Owners Policy), you can add a cyber liability endorsement. Small businesses should consider this option, and larger companies should opt for more protection. For higher limits and more robust coverage, we recommend a stand-alone Cyber Insurance Policy. This type of policy would be ideal for a business with a lot of online transactions, credit card handling, and sensitive customer or employee data. If you are in the Healthcare industry, double-check that your coverage includes HIPPA data breaches. If it doesn’t, we strongly recommend a stand-alone policy.
Cyber coverage is relatively inexpensive and is a great way to help protect your business from financial ruin. It doesn’t matter how big or small your business is, no company is immune to the threat of a cyber-attack. In addition to practicing the safety precautions mentioned above, we genuinely recommend in investing in a cyber insurance policy. One of our agents can gladly assist you with a quote.
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Contact us or get a free insurance quote for more information.