Helping you prepare when it's your company's turn to have a breach.
Cyber Liability Insurance Benefits
The cosmetic business segment (contract, private label, manufacturers, private label, wholesale distributors and contract fillers) has been quick to capitalize on the new technologies of the 21st century, providing a variety of innovative tools reducing operating costs and expanding productivity from e-mail, online buyers, social media, mass marketing and webinars are just a few examples. New tools are now being utilized cosmetic segment including cloud storage and mobile reports. It is now easier for small businesses to store and access individual client’s (personal financial information) PFI and businesses’ private financial information from anywhere in the world. Unknown to many small businesses, however, is the fact that certain legal responsibilities apply to the storage and management of data.
Would your business be ready to respond to a data breach? In a recent case, a small business services company showed up on a Monday morning and found they were unable to log into their computers. When investigated they found their data had been stolen and their servers frozen. They discovered what may be a small business’s worst nightmare - they were shut down and unable to conduct business. Loss of revenue and reputation was just the start of the problem. This event triggered a breach and customer notification requirement state investigation. An average breach response cost more than $100,000.
The data is compelling, (it’s not if you will experience a breach but when):
- In 2016, U.S. data breaches tracked hit a record high of 1,093 (40% increase over 2015)
- 2016 also saw 1,093 reported data breach incidents, involving more than 36 million estimated records exposed
- Industries affected in 2016: Business services – 45.2%
- Average ransom increased in 2016 to $1,077 from $294
- 36% increase in attacks in 2016
- Ransom kits cost between $10 and $1800
- Consumers were 69% of targets; business were the rest
- 34% pay the ransom, only 47% got access to the data
- 77% of attacks are through email
- 33% involved voluntary divulging of personal information (as opposed to malicious link or attachment)
The recent string of cyber-attacks is a stark reminder of the current threat. Apart from losing sensitive client information to data thieves, a firm stands to lose what it values most – its reputation – the key to building a solid client base.
Additional Coverage Highlights:
- Cyber Extortion Coverage
- Business Income & Reputational Harm Loss
- Digital Asset restoration Costs
- Cyber Crime (Electronic Financial theft)
- Additional insured endorsement automatic
- Privacy breach not limited to network events
- Broad definition of Privacy Regulations including those adopted outside of the United States including Canada and the EU
Broad coverage for acts of third-party vendors/outsourcers for whom you are legally liable
No sub limits contained within Security Breach Response Cost coverage for different elements of response costs
- Voluntary notification coverage where no statutory obligation to notify exists contained within Security Breach Response
- Carve back to contractual exclusion with respect to indemnities given to Insured’s clients for failure to protect personal information of Insured’s clients
Clearly, cyber insurance can no longer be viewed as a discretionary purchase for any business. One data breach can cost you money in customer loyalty, business closure, legal fees and government fines. Cyber insurance reduces damages and fines; secures the breach by hiring forensic experts; help with public notifications to counteract negative press; and monitoring affected customer credit and repairing credit (when applicable).