Would you buy and live in a home without purchasing insurance? A home is often a family’s biggest single asset, and it would be crazy to leave it unprotected. The same goes for any business that collects and stores information about its customers. Cyber liability is a huge issue for companies in 2011, but typical business insurance policies don’t protect against cyber losses. Does your business have cyber liability exposures? You might be surprised at the answer.
Your business does not have to be web-based to have cyber liability exposures. Almost every business collects some form of private or personal information about its customers, such as credit card or Social Security numbers. If that information is lost, stolen, improperly shared with a third party, your business can face legal liability and regulatory action.
Is Cyber Liability a serious threat?
Sony recently experienced a major breach of their Playstation Network that exposed data of more than 77 million customers. The New York Yankees accidentally leaked personal information about season-ticketholders, while a data breach at Epsilon exposed information about customers of several large businesses. Information security is a serious issue, but you might think it only affects large or internet-based companies.
Does your business accept credit cards? Do you have any kind of customer database? Businesses of all sizes benefit from collecting and using customer information, but that information can also put you at risk of cyber liability losses. All kinds of businesses may have cyber exposures, whether you operate a small retail shop with only a Point-of-Sale computer or a multi-office company with advanced network infrastructure.
How much can a data breach cost your business?
According to the Ponemon Institute, the average cost of a data breach is $202 per customer record compromised. It takes as little as 30 seconds to download or transfer 10,000 records of information—that’s more than $2 million of liability in 30 seconds.
When you hear “data breach,” you may automatically think of hackers and assume your business isn’t at risk—after all, hackers tend to target large organizations with highly sensitive information. In reality, cyber liability losses are triggered by a variety of events, including the theft of business laptops, hard-drives, or tape backups, an employee’s improper disposal of private customer information, or software glitches that expose sensitive information on the internet.
Learn more about how cyber liability may affect your business
Keep in mind that typical business insurance policies do not cover losses due to cyber exposures. To learn more and receive free advice, give me a call at (516) 484-5200 or email me at firstname.lastname@example.org.