Does My Company Need Data Breach Insurance?Posted on May 30, 2017
When you have a data breach and your business is a victim of a cyber-attack with a resulting data loss, it’s important to take quick action to restore public confidence in your company. Data breach insurance is not a new coverage and has been around for over a decade. However, few people know about it. A compromise in data is, unfortunately, more common these days, but preparing for it can help keep your company out of hot water if it occurs.
The Definition of Data Breach Insurance
This insurance helps cover costs such as:
- Identity protection solutions
- Public relations
You can protect your business even more with other types of coverage in data compromise insurance depending on which you choose.
If your company processes payment transactions or handles customer data, your risk for a cyber-attack is fairly high. Costs of a data breach can be expensive and can add up quickly for a small business since each compromised record comes with an average cost of $154, according to the 2015 Cost of Data Breach Study: Global Analysis.
Types of Data Breaches
There are several types of data breaches. You may think this type of breach comes from a hacker, but there are other types of cyber incidents like:
- Malware attacks
- Employee mistakes
- Data theft by employees
- Insider data breaches
- Although data breach insurance can cover these forms of breaches, it can also protect you against hackers too who target your clients or your business.
Does your Business Need Data Breach Insurance?
You may already understand the cyber security threat of hackers that target your business and customers’ personal data and how it can lead to liability claims. But, are you taking enough measures to protect your company from this threat?
Chances are your company has a network that your employees save data on, putting your whole operation at risk for a breach of data if a virus gets in this network. Hackers target things like bank account information, credit card and social security numbers and customer records.
Types of Coverage
Data compromise coverage consists of:
- Network Security Liability: Protects you from the cost of data breaches and third-party system damages
- Extortion Liability: Protects you from the costs of handling cyber extortion
- Multimedia Liability: Protects you from damages sustained from intellectual and website property rights infringement
- Privacy Crisis and Data Breach Management: Protects you from costs associated with an incident of data breach including the investigation and remediation, notification, legal costs including litigation and court attendance, regulatory fines and overall management of the breach
Your business can’t rely on your liability policy to cover you for a breach of data. Liability only protects you from costs associated with a tangible property like your computers; not stolen data. Plus, since hackers adjust quickly to different data systems, a good cyber liability policy can be the difference between your company staying in business or having to close its doors.