WHAT IS CYBER INSURANCE and what does it cover in NJ
January 31, 2020
While the insurance buying public is familiar with Auto, Home and Life insurance – even if they don’t always understand the nuances – Cyber insurance is quite a different story.
Cyber insurance is still such a new insurance product and many clients don’t think they need it. However, the reality is that without cyber insurance, businesses could be left out to dry if they are hacked or experience a data breach. In this digital age, all businesses have some sort of sensitive personal data that a hacker might want or the businesses communicate electronically with vendors or customers that may hold this sensitive information. Without a cyber policy, a business could face steep costs associated with investigating and mitigating the situation, down time and lost income, cost of fines, liability claim settlements and loss of reputation.
WHAT IS CYBER INSURANCE and what does it cover?
Cyber insurance is a “catch-all” term for insurance policies that will protect against financial loss due to hacked computers, virus attacks, denial of service attacks, website data claims, infringement of various types of intellectual property, cyber extortion and other technology- related areas. It serves to protect a business from financial loss-while preserving a client’s well being, after an unwelcomed attack.
There are no set standards on what a cyber policy covers, and oftentimes you can customize them to your needs, but some common reimbursements are:
Investigation: A forensics investigation is necessary to determine how breach occurred, how to repair damage, and how to prevent the same type of breach from occurring. Investigations may involve the services of a third party security firm, as well as coordination with law enforcement and the FBI.
Business Losses: A Cyber policy may include monetary losses experienced by network downtime, business interruption, data loss recovery, and crisis management costs which may involve repairing a damaged reputation.
Privacy and Notification: This includes required data breach notification to customers and other affected parties, along with the cost of credit monitoring for a year for those persons/entities whose information was breached.
Lawsuits: This includes legal expenses associated with the release of confidential information and intellectual property, legal settlement and regulatory fines.
Extortion: Reimburses ransom payment and/or pays the costs to restore, replace or recover damaged data
BASIC Steps to Prevent an attack:
1.Set strong passwords (eight character with lower & upper case letters, numbers and special characters) & change passwords periodically
2. Utilize multi-factor authentications, such as a code being sent to a cell phone or an alternate email address.
3. Never share personal information via email. If personal information is requested, provide it by phone or provide through another format.
4. Do not leave computers unattended while logged into system
5. Do not click on links in emails unless you trust the sender.
6. Install SSL Certificate
WHY SHOULD YOU BUY CYBER INSURANCE:
The easy answer: Even when you implement the best pro-active steps, a breach can still occur and most general liability and property insurance policies specifically exclude claims arising out of internet operations or claims related to electronic data. Contrary to popular belief, small businesses are especially susceptible to cyberattacks even though the owners think they are safe or immune being a less valuable target; instead, small businesses are just an easier target because they lack the highly sophisticated security protections of large corporations.
Most small businesses can purchase Cyber insurance at a reasonable cost. The cost of Cyber insurance is based on type of operation and annual sales/gross receipts. The premiums are higher and underwriting criteria more complex for those companies in the medical fields and financial industries.
Call us for advice and a quote (732)-946-9300; Ask for Jennifer