CYBER INSURANCE: BACK TO THE BASICS

Across industry lines, organizations have become increasingly reliant on workplace technology to conduct key business operations. Whether it be for communication purposes, e-commerce, or data collection and storage, continued technological advancements have helped streamline a variety of organizational processes.

Nevertheless, utilizing such technology and digital practices within your workplace carries additional cyber exposures and liabilities. All it takes is a single security failing to cause large-scale damages, leaving your organization to deal with the costly ramifications that accompany a data breach. That’s why it’s crucial to secure adequate cyber insurance.

Specifically, having a cyber liability insurance policy in place can help protect your organization against financial losses that result from a data breach or other cyber incident. Cyber liability insurance typically includes the following types of coverage:

• First-party coverage—This form of coverage can offer protection for any losses that your organization directly incurs from a cyber incident, including:
   
  • The cost of replacing or restoring any lost, stolen or damaged electronic data
  • Income losses and extra expenses that result from disrupted business operations
  • Ransom payments from a cyber extortion incident
  • The cost of notifying any parties affected by a cyber incident
  • Reputation preservation expenses (e.g., any public relations efforts following a cyber incident)
    
• Third-party coverage—This form of coverage can provide protection for claims made or legal action taken against your organization by any stakeholders that suffered losses due to your company’s security failings, including:
   
  • Claims regarding negligent acts, errors or omissions that caused a cyber incident
  • Legal investigation and defense costs that result from a cyber incident
  • Regulatory fines or penalties due to noncompliance with data protection laws

Please remember that Cyber Insurance is NOT a preventative measure by any means but is a risk transfer measure to protect you once a Cyber/Data Breach occurs.