Standard and traditional liability policies do not address the exposures presented by the Internet, which brings about the need for Cyber Liability Insurance. Some exposures that need to be addressed are copyright infringement, defamation and invasion of privacy, among others relative to operation of a website. Most companies have a computer network providing incoming and outgoing email along with a website sharing details about the company.
Surfing the net brings about many potential plaintiffs given that most of us spend a considerable amount of time doing just this. Legal action from just one person could be costly, especially given that website content is huge and rapidly growing, thereby presenting more risk as time goes by.
Available policies include: First and Third Party protection. Breach of Privacy coverage is one of the significant areas of concern, and it includes coverage for damages resulting from violation of HIPAA along with various privacy protection rules. First Party covers claims such as Cyber Extortion and Cyber Terrorism, while Third Party covers Network Security and Privacy Liability.
In the event of a breach, try to remain calm. Although the situation is a serious one, it must be dealt with quickly, and you will need your wits about you to take the necessary steps to resolve the situation. You will need to contact your hosting provider as soon as possible as it will have the tools and information to assist you in managing and resolving the hack and in determining how to save your data. Keep a record of any suspicious data as this will help you and your insurance carrier understand and possibly determine the hack source. Shutting your site off and backing up everything in your servers and all files to a remote storage location will be important, and after this has been completed, you will be ready to download everything again. Most importantly, it is most important for you to contact your insurance agent to begin the process of investigating the breach through your insurance carrier.
The need for Cyber Liability insurance is great as cyber risk continues to increase; data breaches affect millions of records a year. Cyber security threats could result in substantial monetary and reputational costs to a company. If you consider this risk based on your total number of customers, you will see how the potential financial cost could have a significant negative impact on your company’s bottom line. We feel this coverage should be considered by all companies as the risks and exposure bases continue to grow.
Author: Joanne Barbaro, Commercial Account Manager