Don’t Be a Victim of a Cyber Scrooge. Avoid Cyber Crime and Costly Data Losses During the Holidays, and Always.
Every year the number of electronic transactions and data transfers that take place during the holidays grows significantly. While individuals are encouraged to take steps to protect their identity and their confidential information online, businesses too need protect themselves from cyber threats at the holidays. Even a minor data breach and a small number of exposed records can cause a huge financial loss.
Almost every business has at least some cyber risk exposure that needs to be addressed. You do not need to sell a product or provide services over the Internet to be susceptible to cyber crime or a data breach that can be financially devastating. Law firms, manufacturers, retailers, restaurants, health care providers, technology companies, government agencies, financial institutions, universities and more ALL need to be aware of the cyber risks they face and take steps to mitigate them.
What is Cyber Liability?
Cyber liability refers to a wide range of potential liability exposures that can occur while using, storing or transferring data electronically, including:
- Failure to protect personal or corporate information stored on computer systems, networks, smartphones, laptops or even paper files
- The costs associated with statutory requirements to notify individuals or corporations that their sensitive information has been breached
- Public relations and investigative costs associated with data breaches
- Loss of income when a hacker prevents customers from accessing your website
- Personal injury (libel) claims stemming from your website, blog or social media accounts
- Business interruption and loss of income for a client or partner because of a hacker or security breach on your computer system, network or website
If you handle electronic data, especially personally identifiable information about your customers, you are especially susceptible to cyber crime. Sensitive data stored in your computer or network can be breached in a variety of ways, from stolen laptops and portable devices, to rogue employees, theft of digital assets, privacy breaches, and human error.
What Can You Do?
In most cases, coverage is limited for cyber losses under your commercial general liability (CGL) policy. You will likely not have coverage for the costs associated with statutory notification, fines, fees, penalties or class action lawsuits associated with privacy breaches. Some CGL policies do provide some broad coverage for data and privacy breaches, but in most cases you will need to add an endorsement for the specific type of cyber peril that your business faces. You need to carefully assess your risks and find appropriate insurance coverage, as well as institute best practices to ensure that your data is well protected.
- We will work with you to uncover any coverage gaps relating to cyber threats that are unique to your business.
- We will help you find cyber risk coverage for the loss of or damage to data. You will likely need coverage not only for the loss of your own data, but also for being held responsible for the loss of your partners’ or customers’ data as well.
- You may need to add endorsements or entire policies to cover data breaches. There is no standard cyber liability policy form available at this time, as risks are still being identified and policy forms still evolving in response. We will help you find a cyber liability endorsement or policy that is appropriate for your business.
- Consider inviting a data security specialist to conduct a risk assessment for your business. This process can help you discover the strengths and weaknesses of your data handling procedures and fix them before something bad happens.
At the holidays, and always, business owners of all kinds need to be aware of the growing risk from cyber crime and the significant losses that it can bring. Give yourself a gift, and take some time to assess your risk and obtain appropriate coverage. And you can never be too prepared; know the risks you face and put plans in place to prevent them.
Do you have an uptick in electronic transactions during the holidays? Do you feel more susceptible to cyber crime and data losses with every new year? What steps have you taken to prevent data breaches and other types of cyber crime?