In the computer business, IT professionals say that “either you have been data breached or you just do not know that you have been data breached.” In today’s connected corporate world, no business can claim to be 100% immune to a cyber attack. There are significant costs associated with such a breach, and so the risk should be mitigated though both preventative measures as well as insurance.
Cyber liability insurance coverage (“CLIC”) has been available in the market for around 10 years, however, the demand has been increasing steadily as cyber attacks are becoming more prevalent.
Mandatory data breach notification regulations (which vary by jurisdiction) are in part a driver for CLIC as the costs of notifying affected users can be extremely high.
As the expense of dealing with a breach gets higher, and the cost of dealing with mandatory notification is added, the option of using CLIC will become more attractive for many businesses. A CLIC policy will become as standard in the risk management toolkit for a business as a policy covering fire, flood, and theft.
Cyber Risks to Consider
Insurance can cover a variety of risks:
- Privacy & Security Liability Breach of an employee or third party’s rights, theft or disclosure of personal information of a third party, failure to disclose or notify of a privacy breach, failure to protect against unauthorized access, theft of data, or denial of service attack, virus transmission on your computers, notification costs.
- Fines & Penalties Civil fines/penalties imposed, funds to pay consumer claims.
- Privacy Breach Response Expenses Expenses related to the management of an incident, the investigation, the remediation, PR consultant, call management, credit checking for data subjects, legal costs, court attendance
- Multimedia/Media Liability Coverage Third-party damages covered can include specific defacement of website and intellectual property rights infringement.
- Cyber Crime losses due to a threat of extortion, identity theft
Van Helden Agencies was described by John McArthur, President of Safeco Insurance (1990) as “The best insurance agency in Canada.”