Cyber Liability Trends
Cyber Liability continues to be a major issue for many Denver businesses. Is Cyber Liability part of your Business Insurance Program? In today’s data-driven social media world, Denver businesses of all sizes have had a cyber-attack or data breach. Statistics show 40% of all cyber incidents affect businesses with fewer than 100 employees. With the recent Target breach, many individuals and businesses are considering cyber or identity theft insurance.
Hackers caused 32 percent of breach events and were responsible for 75 percent of all exposed records. Industry experts concur that these incidents can be directly attributed to increased use of malware. Healthcare was the sector most frequently breached (29.3%), followed by Financial Services (15.0%). The average cost to business per lost/stolen record was $307. Provided by NetDilgence
Cyber Liability Examples
- At a Blockbuster retail site, hundreds of names/addresses, dates of birth, social security numbers and credit card numbers were found discarded in a dumpster.
- A University of Texas student hacked school network and stole 4,719 student and faculty social security numbers.
- A hacker successfully obtains sensitive personal information from the insured’s computer system. As a result, a number of donors bring a claim against the insured for allowing access to their personal information. Total cost to business was over $75,000.
- The insured’s Chief Customer Service Officer has his laptop stolen. The laptop contains over 100,000 donor records, including their personal contact information. Notification cost ran over $200,000.
- An insured receives an email that appeared to be from its bank but was not. The insured’s employee opened the email, which activated a computer virus called a Trojan horse that reads key strokes from their computer. The perpetrator used this means to obtain banking and password information and initiate a fraudulent electronic wire transfer from the insured’s bank account Total loss to business was $55,000.
Cyber Liability Considerations
- With more companies beginning to store information on the “cloud” there will be more universal breaches causing greater losses.
- Cyber Liability insurance is a real option providing value added coverage and services.
- Industries most exposed are; healthcare, medical, retail, financial institutions, technology and hospitality,
- Cyber recovery costs are rising, even with new technology.
- Individual states will be beefing up mandatory reporting laws and imposing fines for lack of reporting.
- New technologies will allow cyber-attacks to come through smart phones and tablets.
- Small businesses may be the most prone, as they have the least protection.
Cyber Liability Insurance
Cyber liability coverage (for data breaches) has evolved from just insurance for information technology companies to coverage that nearly every kind of business should have – if they don’t already. From retailers, banks, contractors, distributors, restaurants and medical offices, many businesses are unaware of the severe data breach exposure they face. In short, any business not making an effort to protect personal private information is seriously out of step with the emerging landscape of privacy law. We can provide your firm with the right combination of pricing and coverage.