Cyber Coverage – Why you absolutely need it!

Date: Apr 9, 2019
By: Basi Insurance
In: , , , ,


Cyber crime is the fastest growing crime in the world, but most attacks
are not covered by standard property or crime insurance policies.
New crimes are emerging every day. The internet means that your business is now exposed to
the world’s criminals and is vulnerable to attack at any time of the day or night. Phishing
scams, identity theft, and telephone hacking are all crimes that traditional insurance policies
do not address. Cyber insurance can provide comprehensive crime cover for a wide range of
electronic perils that are increasingly threatening the financial resources of today’s businesses.

Systems are critical to operating your day to day business but their
downtime is not covered by standard business interruption insurance.
All businesses rely on systems to conduct their core business, from electronic point of sales
software to hotel room reservation systems. In the event that a hack attack, computer virus or
malicious employee brings down these systems, a traditional business interruption policy
would not respond. Cyber insurance can provide cover for loss of profits associated with a
systems outage that is caused by a “non physical” peril like a computer virus or denial of service

Data is one of your most important assets yet it is not covered by standard
property insurance policies.
Most businesses would agree that data or information is one of their most important assets. It is
almost certainly worth many times more than the physical equipment that it is stored upon. Yet
most business owners do not realise that a standard property policy would not respond in the
event that this data is damaged or destroyed. A cyber policy can provide comprehensive cover
for data restoration and rectification in the event of a loss up to the full policy limits.

Third party data is valuable and you can be held liable if you lose it.
We all hold more data than ever before and often this data belongs to our customers and
suppliers. Non-disclosure agreements and commercial contracts often contain warranties and
indemnities in relation to the security of this data that can trigger expensive damages claims in the
event that you experience a breach. Increasingly, consumers are also seeking legal redress in the
event that a business loses their data. This risk is further heightened in the event that you hold any
data on US consumers.

Retailers face severe penalties if they lose credit card data.
Global credit card crime is worth over $7.5 billion and increasingly this risk
is being transferred to the retailers that lose the data*. Under merchant service agreements,
compromised retailers can be held liable for forensic investigation costs, payment card
re-issuance costs and the actual fraud conducted on stolen cards. These losses can run into
hundreds of thousands of dollars for even a small retailer. Cyber insurance can help protect
against all of these costs.

Complying with breach notification laws costs time and money.
Breach notification laws are slowly being introduced across many different countries. These
generally require businesses that lose sensitive personal data to provide written notification to
those individuals that were potentially affected. Even though a legal obligation to notify only
currently exists in some countries, this is changing and there is a growing trend towards
voluntary notification in order to protect your brand and reputation. Customers who have had
their data compromised expect openness and transparency from the businesses they entrusted it
with. Cyber policies can provide cover for the costs associated with providing a breach notice
even if it is not legally required.

Your reputation is your number one asset, so why not insure it?
Any business lives and dies by its reputation. Although there are certain reputation risks that can’t
be insured, you can insure your reputation in the event of a security breach. When your systems
have been compromised, you run a risk of losing the trust of your loyal customers which can
harm your business far more than the immediate financial loss. Cyber insurance can not only help
pay for the costs of engaging a PR firm to help restore this, but also for the loss of future sales that
arise as a direct result of customers switching to your competitors.

Social media usage is at an all-time high and claims are on the rise.
Social media is the fastest growing entertainment channel in the world. Information is
exchanged at lightning speed and exposed to the world. But often there is little control
exercised over what is said and how it is presented and this can give rise to liability for
businesses who are responsible for the actions of their employees on sites such as LinkedIn,
Twitter and Facebook. Cyber insurance can help provide cover for claims arising from
leaked information, defamatory statements or copyright infringement.

Portable devices increases the risk of a loss or theft.
The advent of portable devices and the ability to work away from the office has made life a lot
easier for many of us. However, this new style of working also means that important and
confidential data can be stolen or lost much more easily. A laptop left on a train, an iPad
stolen in a restaurant, or a USB stick going missing are all good examples. In addition, the
devices themselves are being targeted with a growing number of viruses being built just for
them. Cyber insurance can help cover the costs associated with a data breach should a
portable device be lost, stolen or fall victim to a virus.

It’s not just big businesses being targeted by hackers, but lots of small
ones too.Whilst the large-scale hack attacks on the news often involve big companies, small
companies are also at risk and often don’t have the financial resources to get back on track
after a hacking attack or other kind of data loss.

Interested in a quote or have a question ?
Call Basi Insurance Services, Inc. (209) 847-3065

Special thanks to Evolve MGA for content and quoting assistance. For more information on Evolve, visit  

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