Technology Tuesday: Do You Need Cyber Liability Insurance?
As our world continues to become increasingly networked and Internet-centric, data and security breaches are more frequent and commonplace. Sony, Target, Home Depot, Staples, JPMorgan Chase and TJ Maxx are just a few of the well-known companies that have been subject to highly publicized security breaches in recent years. Many companies, both large and small, now consider it not a question of whether they will be hacked but of how they will prepare for and mitigate the resulting damages.
Therefore, it may make sense for a company to obtain cyber liability insurance itself to help manage and mitigate its risks. Despite increases in the number of reported security breaches, cyber liability insurance premiums are purportedly decreasing due to increased competition as more insurers enter this market and more historical data being available on data security risks.
Companies should consider using cyber liability insurance in two different ways, both by maintaining cyber liability coverage themselves and by contractually requiring third-party vendors that provide services via the Internet (or that otherwise access, furnish, process or store data electronically) to maintain cyber liability coverage.
The liability and risk exposures stemming from business websites can be tremendous. What was once the worry of publishers is now the worry of every business maintaining and upgrading a website. This means unless you have specific Cyber Liability in place, you could be facing a number of liability issues. Issues of accuracy, originality, and false advertising are all quite common when it comes to Cyber Liability. Online business happens at the speed of light – don’t wait until it’s too late.
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