According to the 2009 CSI/FBI Computer Crime and Security Survey, the financial stability of over 70% of American companies is threatened by their lack of cyber insurance. Computer networks have opened a whole new world of possibilities for businesses. Without cyber insurance, they can prove to be a Pandora’s Box full of threats and liabilities that could spell the end of your company. The following four situations are just a few of the many instances where having cyber insurance, also known as cyber liability insurance, can save your business from ruin.
1) Cyber Insurance Protects Site Content
Publishing content online can lead to all sorts of problems. Accusations of libel, slander, and theft of intellectual property can be raised by competitors. Even if the offending content was produced by a contractor, your company is still at risk if it breaks copyright or IPR (Intellectual Property Rights) rules. While the rules governing copyright of online material are clear, shockingly few websites adhere to them. You may not be aware of the constantly evolving standards governing website content, utilizing cyber insurance could assist you in the event your content causes a violation. Cyber insurance helps protect against spurious lawsuits, and in case of a court proceeding, could pay damages up to the amount specified in the policy.
2) Cyber Insurance Guards Against Data Breaches
Cyber insurance is a necessary precaution when it comes to safeguarding customer data. In some states, privacy breaches must be reported to customers, and business interruption resulting from compromised servers or data centers can be crippling. Even fax machines and photocopiers can contain information that must be properly scrubbed before the equipment is recycled, resold or disposed of. Cyber insurance supports you through troubled times, guarding your company against claims related to breaches in privacy.
3) Cyber Liability Insurance Covers Employee Gaffes
If your employees use the internet, there’s a chance their online activity can land you in hot water. Posts on blogs and forums can be viewed as slander by other companies, and even the contents of emails can provide grounds for a lawsuit. Competitors will think twice about taking legal action if they know you have cyber liability insurance. In the event a lawsuit is brought against you, your cyber insurance could cover a portion of the damages.
4) Cyber Insurance Works Offline As Well
Cyber insurance doesn’t just cover networks. Employees often travel with their technology or take it home with them, and the loss of a company laptop or smartphone causes legal problems as well as logistical ones. The loss or theft of company technology can lead to extortion, loss of proprietary information or the exposure of customer data.
The US Department of Defense was recently sued for nearly five billion dollars – $1000 for each of the 4.9 million people whose medical information was exposed in a data breach. While your business may not operate on this scale, you still have a lot to lose if customer data is compromised. Whether it’s a blog post by a disgruntled employee, a programming error, or the loss of a laptop, you are responsible for keeping your clients’ information private. Cyber insurance could protect your company from the legal and financial repercussions of a data breach, virus, or IPR issue. Get smart, get cyber liability insurance today!