As the internet celebrates its 50th birthday, it’s incredible to look back and see how technology has dramatically changed our lives over the course of half a decade. As technology continues to develop at an astonishing pace, transforming the way we communicate, modern medicine, currency, and even entertainment, the dangers of cyber attacks grow as well.
Ransomware alone has become one of the most dangerous possible cyber attacks that individuals and organizations face today as these attacks increase by 37% during the third quarter of 2019 alone. As these attacks increase, ransomware damage costs are climbing to overwhelming amounts.
We have now reached a point in which it’s imperative that all organizations review their cybersecurity posture closely. Organizations must now take a realistic approach and prepare for an inevitable attack. But how much does ransomware cost when a company is hit? It’s enough that 60% of small businesses fold within six months of an attack.
As it’s impossible to entirely prevent a ransomware attack on businesses, a cyber liability policy has become a necessary cost and fundamental protection for any organization.
ProWriters, understands that cyber insurance can seem complicated. With our Cyber IQ Comparative Rate Platform, we allow brokers to instantly compare multiple quotes from multiple carriers to provide your clients with the best possible coverage. In the event of a cyber breach, your clients will have access to all of the best vendors to assist with the recovery process and immediately work to mitigate the damages.
How Does A Cyber Liability Policy Protect Your Clients?
A cyber liability policy offers a number of coverages for expenses that you may face in the event of a ransomware attack.
- IT Forensic Costs
- Notification Costs
- Credit Protection Costs
- Crisis Management Costs
- Crime & Social Engineering Costs
- Breach of Contract Claims
- Negligent Protection of Data Claims
- Transmission of Software Viruses
- PCI Fines and Penalties and Assessments
In addition, a cyber liability policy can provide multimedia coverage, coverage for ransom payments, cyber business interruption, and digital asset damage.
Claims Scenario: A Law Firm Suffers a Ransomware Attack
In order to understand how a cyber liability policy can protect your clients, it’s important to be aware of the possible cost of a ransomware attack. Let’s take a look at the damages of a ransomware attack both with and without a cyber liability policy.
A law firm is contacted by a hacker who demands $25,000 within 96 hours or all of their files/data will be deleted and their client’s private information will be released. They are completely locked out of their systems.
1. Firm Does NOT Carry a Cyber Liability Insurance Policy
As the law firm does NOT have a cyber liability policy, they are forced to pay the $25,000 ransomware demand out of pocket. During the three days it took to recover access to their systems, they had to enlist another law firm to take over important upcoming cases and pay overtime to redo work product that was inaccessible during the lockdown.
A forensic IT firm was hired to investigate the cause of the breach and confirm what information the hacker gained access to. Once this information was confirmed, they attempt to notify all affected parties of the breach quietly to avoid news of the breach spreading. However, not realizing they must comply with PCI regulations, they run into a number of fines and legal fees. They are ultimately forced to offer credit monitoring protection for all affected parties, despite the costs.
Due to the public perception of the breach, the firm lost a number of clients who took their business elsewhere. With the loss of business and costs incurred due to the breach, the firm ultimately had to file for bankruptcy.
2. Firm DOES Carry a Cyber Liability Insurance Policy
As this firm DOES carry a cyber liability policy, they immediately contact their insurance carrier who assigns a breach coach to walk them through the recovery. After an assessment, the demand is paid by their insurance policy to protect the sensitive information. An IT forensics team then locates the breach and secures their systems.
While they did run into three days of business interruption, the cost of hiring another law firm to step in for them is covered under their policy.
The public relations firm that was hired by their insurance carrier notified all affected parties of the breach with transparency and they avoided all fines and penalties. They were able to offer immediate credit monitoring protections, saving the trust of their clients and the reputation of their organization.
Ultimately, these costs were all covered by their cyber liability policy, less their deductible. Following the breach, they were able to resume business as normal.
Are You Vulnerable?
Ransomware damage costs are now up to $200,000 on average for small businesses, leaving many unable to recover. Protect your client’s organization from this imminent threat.
For more information on how a cyber liability policy can protect your organization, contact a ProWriters expert today or call (484) 321-2335 with any questions.