Cyber Liability in California a Major Concern for All Businesses
Even Small Businesses Have Big Risks
What Is so Innovative About Business Insurance?
Here Is Why You Should Be
Have you or your employees ever opened an email from someone you thought was a trusted source only to find later you have been a victim of a phishing attack? Phishing is the most common type of cyber breach and costs businesses millions of dollars every year. Phishing is not just about a onetime access to your computer, it is also about installing viruses that stay on your computer and copy passwords and other important information. These programs can get into your network and steal all kinds of personal information. Sometimes you do not even know they are there.
The recent breach at Equifax was a result of the failure of risk management processes to identify possible scenarios and having the procedures in place to limit the risk. The public relation nightmare of having a breach can have a negative impact on your business reputation. “It can take 20 years to build a reputation and five minutes to destroy it.” Warren Buffet
Cyber liability concerns were once thought to be only associated with technology businesses. However, in today’s world every business has a risk of having a cyber liability issue. Businesses with less than fifty employees have the highest risk of having a cyber breach or cyber liability claim because they often lack the proper technology or the proper procedures to prevent attacks. If large companies like Target and Experian have breaches, then your business is it risk as well.
Interesting Facts About Cyber Security
- Retail is one of the hardest hit industries.
- There is a cyber-attack every 30 seconds in the United States.
- Over 50% of businesses have experienced a web-based attack.
- 158,000 personal records are lost or stolen every hour.
Source: Cybersolutions.com, September 2017 report
Types of Businesses That Have the Greatest Cyber Exposure
- Medical professionals
- Law firms
What Can Your Business Do to Reduce the Likelihood of a Cyber Breach?
The good news is your business can do a lot to reduce the chance of having a cyber breach including:
- Make sure all employees follow HIPPA laws. This is an excellent way to limit the use and access to personal information.
- Never allow client information to be used on an unsecured network. That means no laptops at the coffee shop.
- Require all employees to have long passwords using number and letters.
- Keep your security software up-to-date.
- Have a written cyber breach policy and make sure all employees are trained on it.
- Hire an IT manager, or have an experienced third party firm manage your cyber risk.
- Instruct employees not to open email from unknown sources.
- Perform regular vulnerability tests.
- Make sure your business has the latest anti-cyber software.
- Do not allow business computers to be used for anything personal.
- Have daily backups of your data stored offsite.
- You may want to invest in an email encryption program.
- Do not give employees administrative rights to change security settings.
What Can Cyber Insurance Cover?
Cyber liability insurance usually is a separate coverage or policy that protects your business from cyber liability both external and internal. This coverage has been around for over 15 years. There are several parts to a cyber liability policy, and these can include media liability, network security, and errors and omission. Cyber liability is different from a cyber breach. Cyber liability covers your business’s legal liability for liability involving intellectual property, copyright, libel, and slander.
Cyber breaches are covered under the network security portion of the policy. This kind of exposure involves breaches of client information to others without approval. There are strict requirements and penalties imposed upon businesses for these kinds of breaches. There are also State of California notification requirements that can cost up to $250 per individual breach.
At Leap/Carpenter/Kemps we are ready to help find a cyber liability policy that fits your needs. We have a team of experienced and licensed professionals who know and understand your industry, and who can help you identify your risk and provide real solutions. We also offer other kinds of business insurance solutions and are happy to provide a free review of your entire insurance program.