We’ve all heard the reports on the news and talk on the radio about the threat of cyber security. But is it really that serious? The answer is yes. Cyber security and cyber liability insurance are some of the most rapidly growing industries, and for good reason. It’s important to be realistic when considering the threat of a cyber attack. For all organizations, it’s not a matter of if, but when. As cyber security threats continue to evolve and grow, the potential third-party cyber liability associated with these threats grows as well.
This largely stems from the Personally Identifiable Information (PII) that has been put at risk upon a data breach. This doesn’t only affect your organization’s information, but anyone you work with who would have their information listed within your system. PII, as defined by the General Services Administration, is “information that can be used to distinguish or trace an individual’s identity.”
Personally Identifiable Information that may be compromised could include:
- Credit card numbers
- Social security numbers
- Bank account information
- Personal health information
- Sensitive corporate information
When this type of information is compromised, it can put your customers, clients, employees, and your organization at risk. It doesn’t matter if the data breach affected one or two people, or even up to 11 million, this is where third-party cyber liability claims can be presented and this can be a costly process. Not only can your company suffer from a lack of public trust and potential damage to your organization’s reputation, but also potential claims and lawsuits for the breach of PII. These claims may result in financial harm as well.
Without third-party cyber liability insurance, you could be covering a number of serious expenses as a result of claims out of pocket, such as:
- Breach of contract
- Negligent protection of data
- Network security breaches
- Transmission of software viruses
- Denial of service attacks
- PCI fines and penalties and assessments
As it’s clear that the risks of third-party liability claims could be detrimental or devastating to an organization, it’s imperative that you select the most capable cyber security vendors to assist you should a breach occur.
The Qualifications of a Capable & Trustworthy Third-Party Vendor
- Resources & Education
As cyber attacks constantly evolve, it’s important that your cyber vendors evolves as well. Your vendor should be up-to-date with the latest risks and aware of all current rules and regulations that need to be followed, should a data breach occur. Failing to comply with these regulations could result in serious fines. In addition, your vendor should keep your organization up to date with any available risk management information that may better protect you. ProWriters offers a FREE downloadable eBook, Creating a Comprehensive Cyber Risk Management Plan, to help you identify industry-specific exposures, the top cyber security threats, the essentials for any cyber risk management plan and the best practices for cyber security training.
- Cyber Security Practices & Insurance
Before conducting business with a third party vendor, it’s imperative that you thoroughly investigate their cyber security practices and cyber liability insurance policies. With a strong cyber security system, the risk of their system (and potentially, your information) being hacked will be significantly reduced. However, as the chances of a cyber attack are now the highest they’ve ever been, it’s not a matter of if – but when. In the event that your third-party vendor is hacked, it’s crucial that they have a strong cyber liability policy in place to help them respond appropriately and as fast as possible to mitigate the risks. With a cyber liability policy, you’ll have access to all of the top vendors to help you mitigate the damages, such as:
- Law Firms
- IT Forensics
- Public Relations
If a third party vendor you’re considering doesn’t have strong cyber security or cyber liability insurance, the risk of conducting business with them is too great.
- Efficiency & Timeliness
A cyber security vendor must be timely and efficient in the event of a data breach. As more time goes by, the ill effects of a data breach only increase. A quick and well thought out response is key to mitigating the damage of a data breach. The quicker you and your third-party vendor’s response, the less impact the breach will have on your organization, customers, and clients.
To minimize your risks, should a data breach occur within your organization or business, it’s important that the most capable third-party vendor is selected via your cyber liability insurance policy to guide you through recovery.
To speak with a ProWriters expert about third-party cyber liability coverage, contact us, or call us at (484) 321-2335 with any questions.