What is Cyber Liability Insurance, and Why Do You Need It?
The news reports of cyber attacks growing more dangerous may sound exaggerated. However, they are absolutely true. At ProWriters, we understand how serious cyber security threats have become.
As our society becomes increasingly dependent on technology, the internet, and cloud-based servers, our private information becomes more susceptible to ever-changing cyber threats.
Still, you may not be as familiar with the cyber liability claim examples from CFC’s Cyber Insurance Guide as you are with other forms of insurance that you sell, such as GL, Property, or Auto. It’s essential to be aware of these potential severe risks your clients face in the event of a cyber attack.
The scary truth is that over half of small to mid-sized businesses cannot recover following a data breach. A robust cybersecurity system and team are vital to preventing cyber attacks. Still, as the prevalence of these attacks continues to increase, the chance of a security breach continues to climb.
Cyber Liability Coverage Keeps Your Business Safe and Secure
A cyber liability policy is the best way to protect an organization and mitigate the potential damages of possible cyber events. ProWriters allows you to quote insurance products from multiple carriers to secure the best policy for your specific client.
Today, the average cost of a data breach is $4.24 million. With rising ransomware demands, legal fees, regulation fines, communication costs, and IT forensic expenses, the damages of an attack will add up quickly. It’s essential to make sure your clients have first-rate coverage to minimize the risk of these cyber exposures.
ProWriters offers more than 20 years of industry experience to provide you with access to all of the best possible vendors. Unlike other organizations, ProWriters is relationship-focused, meaning we provide the best possible service to each of our clients.
So what kind of protection does a cyber liability policy provide in the event of a network security breach?
Putting Cyber Coverage to Use
Understanding cyber insurance can be complex. Cyber insurance coverages are generally not considered a top-of-mind expense for business owners. However, the following examples demonstrate how a cyber liability policy can protect your clients from serious financial consequences in the event of a cyber attack.
A financial controller of a law firm received a call from the firm’s bank advising that there had been some suspicious wire transfers in the firm’s account. The caller requested the firm’s password and pin code to freeze the account and protect the remaining funds. The financial controller provided him with the requested information.
The next day, the financial controller contacted the bank and learned that they had no record of their prior conversation. They advised that the firm’s funds had been wire transferred to several overseas accounts, all of which were too late to recall. Because this transaction had been authorized by the financial controller, there was nothing the bank could do.
As the firm had a cyber liability policy with cybercrime coverage with social engineering, they were able to recover the stolen funds, less their policy deductible.
A private healthcare clinic was the victim of a cyber attack in which patient information was stolen from their computer system. The hackers threatened to post the data publicly unless they received a ransom payment of $13,220 in Bitcoin.
They contacted their cyber insurers, who helped the healthcare clinic’s IT team immediately fix the vulnerability. A local IT forensics specialist began verifying the hacker’s claim and confirmed that data related to 3,000 patients had been compromised. However, this was data related to names and addresses only.
Ultimately, it was decided that they would not pay the ransom. Instead, their insurer connected the healthcare clinic with a crisis communications consultant who helped them notify all affected parties. They did not hear from the hackers again.
The cost of the IT forensics team and the crisis communications company were covered under their cyber liability insurance policy, meaning the clinic only needed to pay their deductible.
A food trucking company suffered a ransomware attack in which their data was encrypted, and the cybercriminals demanded a ransom of $9,920 for the decryption key. The company found themselves unable to access their routes, logistical information, contacts, and payment card processing capabilities.
The CEO refused to pay the demand, and they set about reconstructing data from paper records and employee knowledge of day-to-day operations. This resulted in extensive overtime costs in addition to loss of business income.
Ransomware attacks like these can be debilitating to businesses. But, after adjustment of their cyber insurance claim, they were able to recover nearly all of the financial loss thanks to their cyber policy.
Get Started With ProWriters
Seeing these cyber liability insurance examples, it is clear that no matter the size or industry or your client’s business, comprehensive coverage is an absolute necessity. At ProWriters, we offer flexibility and simplicity in comparing professional insurance. Our streamlined and simplified process allows you to find the best possible insurance coverage to fit your clients’ specific needs, without any unnecessary steps.
In addition, our experience, which involves over 20 years in the industry, and our obsession with service provides the most effortless process for agents, leaving their clients wholly satisfied.
To learn more, contact a ProWriters expert today or call us at 484-321-2335.