Most businesses today send, receive, and store electronic data. While automated data processing has numerous benefits to your business, it also exposes you to an array of cybercrimes. For instance, a security breach could result in data loss, damage, or theft. If the compromised data belongs to your employees, customers, or vendors, you face the risk of getting sued for the damages.

The entire misfortune could cost your organization a substantial amount of money as you curb the effects of the breach. However, you can protect your business against data breach-related costs by purchasing cyber liability insurance.

How Cyber Liability Insurance Protects Your Business

As long as you use technology for data exchange and processing, you stand the risk of a data breach. The results can be catastrophic. A cyber liability insurance policy helps your organization recover from a data breach by covering costs related to:

• Revenue loss
• Business interruption
• Legal fees
• Equipment damages
• Forensic analysis
• Public relations expense, and
• Notification costs

Doesn’t seem like it can happen to you?  Consider this recent example, shared with us by CFC, our Primary Cyber Insurer. 

Social engineering involves the use of deception to manipulate individuals into carrying out a particular act, such as transferring money, handing over confidential information, or clicking on a malicious link, and it’s causing serious financial harm to businesses around the world.

One of the most common types of social engineering is CEO fraud. This is typically a targeted attack where a fraudster impersonates the CEO or another senior executive within the organisation and instructs a member of the finance department to make an urgent payment to a particular account for a specific reason.

More often than not, the CEO or senior executive in question will have had their email account compromised, but you don’t even need to be hacked in order for this kind of fraud to be carried out. Some fraudsters will go off publicly available information, finding out what the CEO’s email address is and amending it slightly before targeting a junior employee in the finance department who’s often inexperienced and eager to impress his or her seniors. Many fraudsters will monitor social media sites and LinkedIn to see when the CEO or senior executive is away from the office to reduce the likelihood of having their scam uncovered.

Any business that transfers funds electronically can be susceptible to losses of this nature. One such company affected by a case of CEO fraud was a manufacturing company, specialising in the production of machinery used in the textile industry. As part of their business operations, the company utilized the services of a number of contract manufacturers that produce and supply specific component parts used in the firm’s manufacturing processes. 

The scam all began when the CEO fell for a credential phishing email.  In this case, the fraudster managed to trick the CEO into volunteering his email login details, identify who was responsible for authorising payments and work out when the CEO was out of the office on a business trip, as well as setting up forwarding rules in the CEO’s inbox to avoid detection and making use of one of the insured’s genuine contract manufacturer’s invoice templates to add authenticity to the scam.

Read the full case study here

With more and more financial transactions being carried out electronically, the number of opportunities for cybercriminals to steal these funds has never been greater. 

Having a cyber insurance policy in place protects your business by:

Providing an Extra Protection Layer on Your Digital Assets

Experiencing a data breach could cost you a substantial amount of money or cause you to cease business operations entirely. In most workplaces today, laptops and other mobile devices containing business data can leave your business premises, increasing your risk of a data loss if proper protection and processes aren’t in place. 

Exercising Data Protection Measures

Insurer can help guide you with the creation of test policies and procedures related to data collection and storage. The policy also ensures you have a data retention procedure that prevents you from keeping unnecessary data. If a data breach occurs even after having exercised these measures, the insurer covers expenses related to the breach notification and remediation, as well as any defense expenses involved.

Recovery after the Breach

If your business data gets compromised, the cyber coverage from the incident includes a team of computer forensics experts being hired to help determine the extent of the breach. If sensitive information has been compromised, the policy addresses potential business loss and any other cost that may occur as you try to recover from the damage.

Bottom Line

All growing businesses should seriously consider cyber insurance. If the unfortunate data breach happens to your organization, you may not be in a position to combat or recover from the losses incurred. That’s why it’s essential to protect your business against the unseen dangers of cyber risks, just as you cover it against natural disasters, physical threats, and other business problems.

With Cyber insurance, organizations can protect themselves Cyber attaches which have emerged as one of the most significant threats facing organizations of all sizes. The Internet and other network operations have created risks that were unheard of less than a decade ago. When cyber attacks (such as data breaches and hacks) occur, they can result in devastating damage, such as business disruptions, revenue loss, legal fees, and forensic analysis and customer or employee notifications.

It is important to remember that no organization is immune to the impact of cyber crime. As a result, cyber liability insurance has become an essential component to any risk management program.

We have developed a score card to help you evaluate your level of risk as you plan your risk Management.  Simply provide your details int eh form and we’ll send you the free, no-obligation scorecard.

Click to download the free scorecard and assess your risk.