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Does My Business Really Need Cyber Liability Insurance?

By: Jeremy Deason – Risk Architect

Within the past five years, we have all become numb to the multiple cyber breaches in the news. Big Box stores or banks being hacked and our Personally Identifiable Information (PII) being exposed. By now it’s considered old news.

Recently, however, we’ve seen an almost daily occurrence of a business, large or small, being held ransom for access to their network; hackers demanding sums from $40,000 to $40,000,000 to allow companies to regain access to their systems.

Many businesses have seen the light and have purchased cyber liability, but many still see it as an unnecessary “extra”. Well, now is the time to get that cyber policy, because the rates are increasing, and, in some cases, doubling.

So, we know we need it, but what do we need? What does cyber liability mean?

We like to explain it to our clients in terms of the claims we are seeing, and the terms used. A good cyber liability policy will cover first party (your business) and third party (your clients/customers) breaches for exposures of Personally Identifiable Information (PII). In addition, it will provide coverage for a ransomware attack on your network or system. Finally, it will also throw in media liability coverage (think trademark infringement, etc.) and social engineering fraud coverage (fake email from someone saying they are in management and need funds transferred).

We often hear from businesses who tell us their policy already has Cyber Liability. While that may be true, the limits are often too low, maybe around $100,000 or even $250,000. The fact of the matter is- you need a limit of at least $1,000,000, but higher would be preferable. Sadly, the average cyber claim right now is well over $1,000,000.

We used to say, “it’s not if, but when?” as we discussed some sort of a cyber claim; the reality is we are past that, and the real question now is “it’s not when, but how much?”.

This has been a brief summary of some of the trends we have noticed with Cyber Liability Insurance. We always recommend reviewing your insurance policy with your independent agent to ensure you have the best possible coverage. The agents at Associates of Glens Falls are ready to assist when you need us.

About Today’s Blogger

Jeremy Deason

Jeremy is the risk architect to a wide variety of clients, including contractors, manufacturers, resort-hotels and social service agencies, to name a few.

Contact Info

jdeason@aogf.com | 518-793-3444 ext. 121