What is cyber liability insurance, and why do you need it? Do you even need it? We’re going to discuss all those things today. And then, at the end, I’m going to give you a few tips that you can implement today in your business to make sure that you are not exposed to a cyber liability insurance claim.
What Is Cyber Insurance?
Cyber liability insurance is designed to help protect against a breach of personal identifiable information and protected health information. It also protects against other cyber threats, such as social engineering and ransomware. These breaches can be committed by an employee error, a rogue employee, or any other outside source.
Cyber liability is composed of two different coverages.
First-party coverage and third-party coverage.
First Party Coverage
First-party coverage is related to the immediate impacts of a breach on the insured. So what affects the insured themselves. This includes the cost of IT forensics, notifications, credit protection, and crisis management.
Third Party Coverage
Third-party coverage is related to lawsuits and regulatory ramifications, such as breach of contract, negligence, and PCI fines and penalties.
Do You Need Cyber Insurance?
Do you need cyber liability insurance? What if you’re just a small company? What if you don’t do a lot of online business?
The answer is yes.
If you are a business that keeps any types of records, you need cyber liability insurance. Whether you’re storing employee records, processing credit cards, or keeping a database of clients, you need cyber liability insurance. Cyber liability insurance even applies to paper records and files in addition to those that are kept online.
In the event of a ransomware or a social engineering liability claim, your cyber liability insurance company will work to get you back up and running as quickly as possible with as little of an interruption as possible. Cyber liability insurance is crucial for any business in the year 2022.
5 Tips To Avoid A Cyber Claim
So now I’m going to give you five tips, things that you can implement in your business right away today to make sure that you can reduce the chance of having a cyber liability insurance claim.
1 – Dual Authorization
Tip number one is dual authorization. Never have any one person sign off on anything. Checks, ACH transactions, and wires need to have more than one person signing off on them. Also, anytime you get an invoice from a vendor, never take the phone number directly from that invoice and call those people to pay the bill. Also, never email directly to whatever email is on that invoice. Use the number that you’ve always used to directly contact them, or use the number that you find in some type of public domain to contact those people directly because what these hackers do is they send you the invoice. It looks legitimate. They put their own phone number on there. You think you’re calling your normal vendor. You’re actually calling the hacker directly and giving them access to your payment information.
2 – Cloud Based Backup
Tip number two is use a cloud-based backup that can be quickly accessed and restored. Keeping data stored on remote servers allows users to quickly access that data in the event of a hacker or a breach or something happening to that data.
3 – Secure Email Gateway
Tip number three is add a secure email gateway or a SEG. An SEG is a type of software that monitors all emails, both sent and received. They defend against spam, malicious attacks, and fraudulent contact, all while ensuring that the legitimate emails actually get to you. A few companies that can offer this service to you are Proofpoint, Mimecast, and Barracuda. And the cool thing is most of these services cost as little as $5 a month.
4 – Password Manager
Tip number four is use a password manager. These password managers allow you and all of your employees to securely store their more complex passwords. A lot of times, you’ll find employees or even yourself using the same email over and over again, just adding an extra number or an extra character at the end, like summer 2021, and now fall of 2021, and now winter of 2021. Using these password software management tools, you can have more complex passwords that are not as easy to hack.
5 – Employee Training
And then tip number five is employee training. Your employees have to know what these threats look like, the dangers associated with them, and the processes that they need to follow to make sure that you’re protecting yourself as much as you can against any type of cyber liability threats. A statistic is that employees, your employees, are the weakest link in generating and helping these hackers access your online information. 90% of cyber liability claims come from employees. Well-intentioned good employees, but employees that have not been trained, so they don’t know what to look out for, and these problems come out of their negligence and their error. So train your employees.
Cyber liability claims are increasing every year. 2021 set records. 2022, they’re projecting to set even more records. As more and more companies are moving online and remote working, these hackers are having a heyday. It’s easy picking for these hackers. So do yourself and your company a favor – Implement these tips and strategies. And if you don’t have cyber liability insurance, you need to go out and get it immediately.
For more information or to get a quote, visit our Cyber Insurance page here.