$2,400,000.......would your business survive an uninsured Cyber (Computer Crime, Identity Fraud, Data Privacy Liability, Business Interruption) loss of this amount? On average that is what an attack by a hacker, rouge employee, a staff mistake, or loss or theft of mobile devices (Smart Phone, laptop, Ipad), that results in access to your customers' private information costs, if that information ends up in the hands of a wrong doer. Cost could total in a high end claim situation, $7,200,000. Costs to repay customers, financial institutions, and your business's defense, can add up to these kinds of numbers.
Statistics show only 1/3 (33%) of all lost mobile devices lost or stolen are recovered. 53% of mobile devices contain private or confidential information, with only 65% of all mobile devices containing precautions to secure private information. Almost one half of all Cyber losses are attributed to lost or stolen devices. On average, a business will pay $214 for each compromised data record.
Other Security risks to your data include breach of network security (password, firewall), cyber extortion, viruses, and denial of service attacks targeted to your business, specifically to slow or stop your network.
There is a noted increase in the frequency and severity of data related incidents, with hacking shifting from crafty thrill-seekers to organized criminals, which includes data theft rings in Europe and China. The increasing interconnectivity of information and systems worldwide including social media, phishing, wireless mobile and cloud computing, are all recent extensions of computing that simplify cyber criminals access and interception of data and private information.
Federal and State Legislation have been enacted to protect consumers and owners of private information but has resulted in little to no relief for businesses who are the guardians of most private information.
Some business owners naively comfort themselves by believing their current protection provides for computer hardware and loss of data and software. But what they are unaware of is that current computer coverage endorsements and forms, similar to those on a package policy, only provide recovery for computer losses by natural causes (fire, wind, hail, etc.). Loss due to breach of private information and data liability can only be covered by a separate Cyber Liability Policy available only from a licensed agent and company.
How at risk is a business for a cyber loss depends on it's exposure, which includes the type of customer information gathered, consequences of an inoperable website for a period of time, and a business's potential financial injury, arising from a website or regular operations breach.
Businesses are facing significant exposures to future cyber losses and new threats are growing and being introduced to the cyber environment daily. Data breaches are not going away but are becoming more criminal in nature with companies in all Industries being affected. Smaller businesses are the fastest growing targeted sector. Since many different companies offer many different cyber coverage options, consult your business insurance professional for the selection of the best one that fits your business.
(Source: Traveler's Insurance Co.)