Cyber Security and Cyber Liability Insurance

Protecting Your Canadian Business: Cybersecurity and the Importance of Cyber Liability Insurance

In today’s digital age, cybercriminals are constantly targeting businesses, and small businesses have become the primary focus due to their perceived vulnerability. According to a recent report in Security Magazine, a staggering 63% of small businesses have experienced a cyber-attack, with 58% suffering an actual breach. While these statistics are alarming, what many business owners fail to comprehend fully is the financial devastation a cyber-attack can cause.

The rapid rise of cyber liability insurance is a testament to the severity of the threat. Cyber liability insurance covers the exorbitant costs associated with a data breach, including but not limited to:

• Legal Fees: Covering the expenses related to lawsuits and class action litigation filed against your organization, as well as fines and penalties incurred from regulatory investigations.
• Ransomware Negotiation and Payment: In the event of a ransomware attack, cyber liability insurance can handle the negotiations and payment to restore access to your data.
• Data Restoration and Emergency IT Services: Rebuilding your network and ensuring its operational status are essential after a breach, and cyber liability insurance can cover these emergency IT expenses.
• Customer Notifications and Protection: In the aftermath of a breach, notifying customers and providing credit and identity theft monitoring services are crucial to maintaining trust.
• Public Relations and Call Center Costs: Expertise in managing public relations and handling inbound calls and inquiries can be covered by cyber liability insurance.
• Loss of Revenue: A cyber-attack may disrupt your operations, leading to lost revenue if you are unable to process sales and deliver goods and services for an extended period.
• Errors and Omissions: Cyber liability insurance can protect your business from liability claims resulting from a failure to perform services or negligence in safeguarding customer data.

Ensuring Cyber Liability Coverage

Obtaining cyber liability insurance requires implementing robust and comprehensive cyber protections. Insurance companies want businesses to minimize the chances and financial impact of cyber-attacks, reducing the need for payouts. It’s important to understand that merely stating you have the necessary policies and protections in place may not be sufficient. You must ensure complete compliance and implementation of the outlined security standards and protocols.

Unfortunately, many business owners unknowingly make false statements or misrepresent their cyber defenses during the insurance application process. They may assume their IT company is taking care of the necessary protections, but this is not always the case.

Working with Your IT Partner

To avoid potential issues with your insurance coverage, it is essential to collaborate closely with your IT company or person. Review the application you completed with them to verify that all the necessary security measures are in place and being maintained. Your insurance agent or broker can help you with this process, as they understand the legal requirements and can interpret them effectively.

Preparing for an Investigation

In the unfortunate event of a breach, your insurance provider will conduct an investigation to assess what happened and the cause of the breach. To successfully claim coverage, you must be able to provide tangible evidence and documentation demonstrating the preventative measures you had in place. Failing to implement these measures as represented on your insurance application could lead to claim denial.

Scheduling a Consultation

If you have any concerns about your current cyber liability coverage, its sufficiency, or the adequacy of your cybersecurity measures, it is wise to seek professional advice. Schedule a consultation with a reputable cyber insurance expert to assess your situation and explore the best ways to protect your business.

Taking Action: Free Cyber Security Risk Assessment

To gain deeper insights into your business’s security preparedness, consider a free cyber security risk assessment. This assessment can identify vulnerabilities and highlight areas that need improvement to defend against cyber threats effectively.

Protecting your business from cybercriminals is not an option; it’s a necessity. Cyber liability insurance serves as a crucial safety net in an increasingly digitized world. By working closely with your IT partner and ensuring strict adherence to security protocols, you can safeguard your business from potential cyber-attacks and their devastating consequences.