Cyber Liability is becoming one of the most crucial components of any business’ insurance portfolio, especially as companies increase their dependencies on digital technologies. An uptick in remote work and companies adopting a larger online presence has caused an increase in data breaches and cyber ransom attacks, where companies must pay to regain access to their systems and files. The specifics of a data breach or cyber-attack vary depending on the industry. The general consequences of a data breach include expenses from notification costs, loss of reputation, statutory fines/penalties, and more. Meanwhile, the general ramifications of a cyber-attack include irreparable damage to businesses’ systems and servers, loss of crucial information, large ransom costs, in addition to the expenses associated with a data breach. Thus, cyber policies provide coverage for a wide array of events that can occur and help provide financial support for associated fallouts.
Companies should implement cyber insurance and maintain diligent internal cyber security processes. firewalls, antivirus and off-site data backup are some starting points in ensuring basic protection. Depending on the industry and type of information, specific processes must also be put into place to determine how information is handled and who has access to areas where information is held. Most importantly, companies should implement training procedures to ensure that remote employees understand the importance of maintaining cyber hygiene.
The majority of data breaches originate due to an employee falling for a phishing scam or clicking an unsecured link in an email. Therefore, training and internal cyber risk management is just as crucial as maintaining adequate coverage. With this in mind, companies must note that most cyber insurance companies require these steps be in place to issue coverage or respond to a claim. As we move into the digital age, it’s imperative for businesses.