What is Cyber Risk?
Cyber Risk derives from the use of the Internet as a tool to conduct e-commerce and general business operations. Common exposures include (but are not limited to):
- Data/security breach
- Copyright or trademark infringement
- Data destruction and/or corruption as a result of a virus
- Cyber extortion & Ransomware
- Hackers, worms, and other cyber meddlers
- Firewall and network security attacks
Why should I buy Cyber Risk Insurance?
If your business uses the Internet, it is exposed to risk that may not be covered under your current commercial insurance policy. In fact, typical General Liability policies often do not cover activities associated with Website Publishing or Network Security.If lack of coverage from existing policies is not enough encouragement for you to purchase Cyber Risk Insurance, then consider the following statistics:
- The average per record cost of a data breach is $214 per customer
- According to a national survey, many business do not have the tools
or procedures in place to detect identity fraud, including an incident
response plan, vendor management procedures, or data encryption for
personally identifiable information.
- Most victims do not even know their data was compromised. 86% of the breaches were discovered by a third party.
- 92% of breaches were from external sources. Over 80% from
overseas; organized crime accounts for 58% of external breaches.
- There are Regulatory Requirements that apply to most
organizations today. Data Breach Notification Laws are in effect in
most states today that require notification of customers in the event of
a data breach. The Red Flags Rule is being enforced by the Federal
Trade Commission (FTC) that requires organizations to have Identity
Theft Protection Programs in place (or be subject to penalties or fines).
The compliance costs to notify customers as well as the risk of incurring
fines/penalties can drive business costs.