cyber breach insurance

Never have cyber-attacks been so plentiful and so devious.

In most organizations, it is not a question of if data security will be breached, but when. And having the tools in place to minimize potential business damage and remediate problems can be the difference between a business surviving a significant data breach, or that same breach becoming its death knell.

Shouldn’t your business do everything it can to mitigate any potential damage from a breach?

Enter: cyber breach insurance.

Cyber breach insurance (also known as cyber liability insurance) isn’t about protecting your business from cyber-attacks. Rather, it’s about helping the business through the aftermath of a data breach. And as with any insurance product, a business should shop for and evaluate the quality of the potential vendor providing the policy.

In forty-seven US states, a business is obligated to notify customers in the event of a data breach — and it is likely that requirement will soon cover the entire country. Cyber breach insurance policies can help with the cost of the steps that need to be taken after a breach, not only legally, but from a business perspective as well.

Shopping for cyber breach insurance? Your business isn’t alone. Here’s a list of the key coverage points you should look for:

NOTIFICATION COVERAGE

Customers potentially impacted by the breach need to be notified. Various pundits have claimed that the cost of notification ranges from 50 cents to $5 per affected party. In any case, the costs of notifying thousands of customers can be significant and should be covered by your plan.

CREDIT MONITORING / IDENTITY THEFT PROTECTION

Customers who have been impacted by the breach should be offered credit monitoring and identity theft protection services, at no cost to them. The generally accepted term of this coverage seems to be 1 year.

LEGAL DEFENSE EXPENSES

If you have a major breach, then there is a good chance someone will take legal action against you. These cyber breach policies can offer coverage for the cost of defending your business in court.

LIABILITY COVERAGE

Liability coverage can help in two ways: (1) the cost of paying the judgement in a civil action filed as a result of the breach and (2) the potential fines from regulatory agencies that might affect your business. Fines can be in excess of over $1,000,000, depending on the regulatory compliance that was impacted.

PUBLIC RELATIONS COSTS

A significant breach can have a major impact on your company’s reputation. Policies can include coverage for the direct cost of hiring a PR firm to minimize the PR impact of a data breach.

THE COST OF COVERAGE

The cost of cyber breach insurance will depend upon common variables including the location of the business, total revenue, coverage desired, current security protection quality (as determined by a security audit), and ongoing security procedures and policies.

Cyber breach insurance is relatively new, and may not be offered by your current business insurance provider. The following is a short list of providers to get you started in your search for coverage.