By Chase Helwig, Assistant Vice President – Commercial Lines

Does a substantial portion of your business operate utilizing some form of technology? Do you store customer and business information on your computers? How about your technicians or employees? Do they use their phones to help communicate important details about work?

Chances are, the answer to the majority of these questions is a resounding “yes.” A common misconception of business owners is that if they are not a tech company or gigantic corporation, then they do not have cyber liability exposures. Well, if you answered yes to the above questions as most businesses do, then you do have cyber exposures. That shouldn’t be too much of a surprise, especially considering how quickly new technologies are coming out to simplify business. Every one of us has been there at some point, whether it’s storing purchase orders in a database or utilizing software-as-a-service (SaaS) solutions to solve problems at work.

Technology has made life easier in innumerable ways. Unfortunately, nothing easy comes without a price. When it comes to technology, that price is a dramatically increased liability pool. If you follow the news, it would be hard to miss some of the consequences of cyberattacks and cyber liabilities in general. It seems like every day a company faces a huge breach, whether it’s Target in 2013 (which affected 41 million people and ended up costing the company $18.5 million) or even Equifax in 2017. According to a 2017 study sponsored by IBM and conducted through the Ponemon Institute, the average total cost of a data breach in 2017 was $3.62 million.

There is a light at the end of the tunnel, however. Cyber insurance coverage is specifically designed to deal with data breaches and cybercrimes from both a regulatory and a civil liability standpoint. Many business owners believe general liability insurance can cover some of the damage stemming from cyber incidents. Unfortunately, that isn’t the case. Cyber insurance will mitigate liability which involves sensitive customer information and help deal with the consequences of it.

Here are a few examples of what cyber policies generally cover:

• Legal fees and expenses from civil or governmental entities
• Notification of customers (many regulations require the notification of customers in the event of a data breach that involves personal information)
• Repair/replacement of damaged equipment and systems
• Data recovery from compromised units
• Restoration of customer identities
• Public relations (data breaches are often accompanied by a decreased brand opinion)
• Business operations (to keep your business running while things are being fixed)

Now it is time to ask again,

Is your business adequately protected against cyber liabilities?

Cyber attacks are becoming more and more prevalent, increasing in frequency right along with the technology that makes them possible. Insurance is just one piece to a larger puzzle. Ask for a comprehensive review of your cyber liability exposures prior to your renewal, as an uncovered claim could spell the end of your business.