Businesses find greater need for cyber liability insurance - MiamiHerald.com
All it takes is one clever hacker or virus to invade your business network and lead to a data breach that can cause massive consequences and financial implications for your company or organization. While ongoing advances in technology and cutting-edge systems help businesses work more efficiently, go paperless and obtain greater gains, these innovations can also leave businesses vulnerable to cyber liability and new exposures to risk.
Most small business owners are not aware that their traditional general liability insurance policies do not cover exposures related to cyber liabilities. The media frequently reports on cyber security breaches within larger corporations, major credit card companies, and even the Defense Department, but rarely do you read about these same types of breaches within smaller businesses, but cyber liability can affect businesses of all sizes.
According to a 2011 survey from Symantec, (the largest maker of security software for computers, best known for its Norton brand), cyber attacks cost companies, on average, $470,000 in lost revenue, downtime and loss of brand confidence. Cyber liability insurance policy premiums can start at $1,000 for limits of $500,000 or greater.
Claims covered by cyber liability insurance can vary widely in terms of nature and severity. We are seeing a trend of more technology firms being required to have cyber liability as part of their vendor and third party contracts. We are also finding that after audits are completed, accountants are beginning to suggest that their clients invest in cyber liability policies. Cyber liability insurance is important for any company that maintains a website, conducts business via the Internet, accepts payment via the website, or stores non-public client and/or employee information within a network.
For example, groups who may have concerns about HIPPA laws, such as hospitals or medical billing companies who service physicians and medical practices, should consider coverage. Most banks, especially larger ones, have discovered that ordinary general liability plans do not cover exposure of cyber liability and have started to require first and third parties to have cyber liability coverage as part of their vendor contracts. Any company or organization that does business on the Internet, has a website, or is paperless, can be at risk to hackers and identity theft.
If a business experiences cyber hacking, the cost to repair credit, discharge fraudulent loans and seek damages from emotional stress could be prohibitive. Cyber liability typically covers the business costs to fix the problem, notification, and the monitoring (years of service), as well as identity theft and ruined credit.
Cyber liability coverage is a relatively new area of the insurance industry, but one that deserves a closer look.
Mark Schwartz is the CEO of Corporate Insurance Advisors and vice chairman of the City of Fort Lauderdale Insurance Advisory Board.
14 May, 2012
-
Source: http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHUTw578Mlx9eQ9LxpAyEU3IOyhbg&url=http://www.miamiherald.com/2012/05/13/2798259/businesses-find-greater-need-for.html
--
Manage subscription | Powered by rssforward.com
