Cyber security is crucial these days when practically everything is stored online or electronically. If you have clients, you typically have information about them stored somewhere, such as their name, address and/or a credit card. A breach of any of this information could be devastating, from the loss of a sense of security to identity theft.
First, it is important to recognize cyber attacks for what they are. There are various types of cyber attacks, such as:
- Phishing. Phishing is common over email and phone, as it tries to convince the recipient to download attachments or click links that are encoded with viruses. The attacker may also try to convince the recipient to divulge important information such as passwords and credit card numbers.
- Denial-of-service (DoS) or distributed denial-of-service (DDoS)
- Ransomware. This software holds information for ransom by denying access. This attack occurred every 14 seconds in 2019.
- Man-in-the-middle (MITM). This attack prevents the victim from accessing the server. The attacker can accomplish this in a few ways, including something called “IP spoofing” that tricks the server system into recognizing its IP address as trusted. The attacker may also hijack a session as soon as the victim connects to the server before disconnecting the victim. This is a type of attack vector.
- Other attack vectors. Attack vectors primarily give the attacker access to a system through malware. This includes drive-by attacks, MITM attacks, zero-day attacks and SQL injection.
The many forms of cyber attacks are constantly growing and developing, which is why it is crucial to invest in high quality and reliable cyber security.
However, not all cyber security systems are impenetrable. Even with the latest technology, you could still be at risk of becoming the victim of a cyber attack. In order to protect your business and clients in the face of a cyber attack, you will need cyber liability insurance.
Cyber liability insurance is a policy designed to protect businesses in case of a cyber attack or breach. In case your cyber protection does not completely stop a cyber attack, cyber liability insurance can protect your business.
What Does Cyber Liability Insurance Cover?
First-party coverages may compensate for expenses directly related to a data breach or cyberattack. This includes recovery costs and other direct expenses including:
- Loss and Damage of Electronic Data: This coverage can help replace electronic data and programs that are damaged or destroyed during a data breach.
- Loss of Income and Extra Expenses: If your business loses income due to a cyber liability issue, this insurance can help cover the loss of income and any other expenses related to the threat of shut down to your business.
- Reputation Damages: In many cases, your reputation may be destroyed due to a data breach or cyberattack. Cyber liability insurance can cover expenses relating to rebuilding your business’ reputation.
- Cyber Extortion: Cyber extortion may occur when a hacker breaks into your business’ data and threatens to hold information hostage until you pay a sum of money. Cyber liability insurance can cover this sum and related incidents.
Third-party coverages cover claims against your business due to a breach. For example, if a client’s information is breached while stored in your business’ information base and decides to sue the business, third-party coverages can help with the business’ legal expenses such as defense costs, settlement expenses, court fees and more.
This can include:
- Media Liability: Media liability insurance can cover claims filed against your business due to libel, slander, copyright infringement, defamation and other issues related to privacy.
- Fines and Penalties: If regulatory agencies fine your company for the data breach, this insurance can cover the expenses.
What Should I Do in Case of a Cyber Attack?
If you are the unfortunate victim of a cyber attack, you should follow certain procedures.
First, pause everything to handle the attack. Continuing business as usual can spread the problem and cause further harm. Halt operations so that you can identify the source of the attack and shut it down. Then begins the recovery process. Evaluate what has been lost or damaged and keep a log of it so that you know what to expect when it comes to recovering or informing clients.
Once you know the extent of the damages and the immediate threat has been dealt with by an IT professional, it is a good idea to call your insurance agent. You will want to discuss your options and keep them in the know in case you must file a cyber liability insurance claim.