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As much as any other aspect of your business, your digital assets need protection from cyber threats. Travelers Insurance notes, “Most executives rank cyber risk as their top business concern, but fewer than half said their company has adopted basic preventive measures such as multi-factor authentication even as the frequency and severity of cyber attacks increase.”
While frontline prevention tactics can be taken to defend your company against many threats, cyber risk is dynamic and evolving at a rapid rate. This makes it increasingly difficult for businesses to measure, assess, communicate, and respond to cyber events. For this reason, it is in the best interest of every business to consider a comprehensive cyber insurance policy as part of their overall risk management program.
Cyber insurance covers the costs associated with cyber crimes and data breaches. Traditionally, cyber “liability” insurance coverage provides reimbursement for third-party legal defense costs a business faces after a cyber attack results in a third-party lawsuit and/or a regulatory fine or penalty. The most common third-party lawsuit occurs after a business loses sensitive personally identifiable information (PII), protected health information (PHI), or payment card information (PCI). The second most common cyber liability lawsuit occurs when a business passes a computer virus to a third party.
Modern-day cyber insurance has liability coverage and extensive first-party coverage built-in for all the costs that come out of the business’ pocket after a cyber attack. Most cyber attacks require expensive forensic experts to stop the attack before it is out of control and a data breach attorney to mitigate any future costs by following federal, state, and private regulatory bodies. Other first-party cyber insurance costs include notification, public relations, system damage & restoration, business interruption lost profit, reputational harm lost profit, cyber crime fraudulent transfers, ransomware extortion, cryptojacking, and hardware replacement.
Standalone cyber insurance is necessary because traditional insurance policies were not designed to handle modern digital threats.
Standalone cyber insurance is necessary because traditional insurance policies were not designed to handle modern digital threats. Many standard first-party insurance policies such as property and traditional crime were designed to deal with threats to a company’s physical assets such as their buildings, machinery, office equipment, and tangible money only. Explicit cyber exclusions have become standard practice in nearly all traditional property and liability policies.
Each year, millions of businesses lose billions of dollars to cybercrime. That statistic grows year over year with more businesses losing more money to digital attacks at an alarming rate.
Partners at Evolve MGA say, “Cyber insurance is a cost-effective cyber risk mitigation insurance product that can save a business hundreds of thousands to millions of dollars in the event of a cyber attack.”
Policy costs can vary based on the size of your business and the scope of your needs but in the event of an emergency, investment in the security and wellbeing of your business pays off.
At Morris & Garritano, our team of professional Risk Advisors have decades of experience placing cyber coverage for a diverse range of businesses and can provide you a quote to best fit your unique exposure and risk.
More than ever, companies not only manage their data and finances online but also the onboarding and operation of a vast, remote workforce. There’s never been a more urgent time to invest in a comprehensive cyber insurance policy.
Due to many pandemic-driven factors, cyber crime is at an all-time high and cyber insurers are now facing unprecedented losses. This has resulted in a hard market, including increased rates, greater underwriting scrutiny, and potential coverage limitations. Regardless, there is still a lot of capacity in the market and premiums are only a fraction of a costly cyber event.
Don’t wait until it’s too late and prepare your business and your employees to stay cyber smart! Take simple steps like implementing MFA, training all staff in cyber security basics, and securing your business with a comprehensive cyber insurance policy.
We at Morris & Garritano will place coverage that not only transfers risk in the event of a cyber attack but also includes proactive cybersecurity risk management resources to help prevent and respond to a cyber incident. Contact our team at Morris & Garritano today to get started in securing your business and protecting your assets on the digital front.