From botnets to phishing, stock price manipulation to ATM hacking, online crime has been popping up in the news with an increasing frequency. Although it is difficult to quantify how much cybercrime is actually taking place out there – especially because many companies don’t report attacks – in 2005, an FBI source estimated that the annual losses to businesses emanating from cybercrime in the US alone amounted to over 67 billion USD. In all likelihood, this figure may have doubled, if not tripled since then. As a result, the need to have technology insurance coverage in place is more important than ever before.
Cyber liability insurance used to be ignored by most companies, viewed as an unnecessary commodity that could be replaced with firewalls and encryptions to preserve security measures. However, the attitude of CIOs has changed radically with the panic of the financial meltdown, the prickly outsourcing uptick, and the tide of potentially destructive technologies such as virtualization, cloud computing, and social networking. Besides, the risks due to Web 2.0 technology and the increased regulation of data, which create fresh reputation and data privacy issues, have called in the need for cyber liability insurance.
Cybercrime Rates are Increasing
A benchmark study of United States companies on the cost of online crime and associated issues carried out in 2011 by the renowned Ponemon Institute indicated that these types of crimes have become a common experience. A sample of fifty companies discovered that on a weekly basis there was at least one successful cyber attack on them – an increase of over 43% from the previous year. But contrary to the belief of many, it is not only businesses that are affected. As a matter of fact, it is the average individual who gets affected the most, both in terms of money and time loss. In addition, there cannot be a bigger loss than when the company you trusted with your private data is breached, such as a bank or credit card company, exposing your confidential information for the taking.
What Does Cyber Liability Insurance Offer?
A majority of businesses benefit greatly from using email and internet in their everyday operations. Nonetheless, technology cuts with two edges: one edge yields business and the other creates problems and losses. Being offline for just a few minutes can cost a tech-savvy business substantial income. Moreover, the systems that businesses use are complex to set up and maintain, yet the owners tend to lack both the time and the know-how to repair them after cyber attacks.
Do you think your corporation’s unique needs are not covered by the available policies, or that your enterprise is not in need of technology insurance coverage? There are countless reasons that businesses ought to have cyber insurance policies. Do not hesitate to talk to an InsuringTech.com specialist about customizing a policy to suit your expertise.
Who Needs It?
All businesses that have websites, use emails, have highly automated systems or store client data electronically need cyber liability insurance. However, there are two significant questions to ask when determining whether there is need for this form of insurance; is my business completely secure from the hidden ills of cyberspace? And, if by any chance my IT system gets compromised, how will my business and customers react?
Remember, the internet exposes businesses to myriads of potential liabilities. Yet, most businesses may never be fully aware of the legal responsibilities that are associated with their internet presence. New laws arise almost daily which generate potential liabilities especially in the realm of domain name infraction and user privacy. Therefore, cyber liability insurance is essential for any business that is using the Web.
Inquire today to find out how your company can benefit from comprehensive tech liability coverage.
