A cyber risk is like any other business risk, and can occur at anytime. Today technology, social media and ecommerce are omnipresent and play a significant role in helping organizations conduct their business and offer products & services to their consumers.
While these channels serve as business enablers on one hand, they also serve as gateways to cyber risks, on the other. For instance, cyber risks make businesses vulnerable to disruption such as ransomware extortion, poor systems performance due to malware and financial losses via phishing and social engineering malpractices.
Role of cyber insurance broker
To help circumvent cyber risks, cyber insurance brokers play a vital role. A cyber insurance broker is a professional who represents you in your search for the best cyber liability policy. The broker works closely with you to analyze your cyber exposure, your desired coverage, terms & conditions of policy, its price, and then recommends you the most-suited policy.
It is advisable to choose a cyber insurance broker carefully because as your business grows, your exposure to cyber attacks will continue to grow. Accordingly, your cyber insurance broker will recommend that your cyber liability coverage grow with it. This way, you can rest in peace that your business always has optimum coverage that protects your operations from cyber risk.
Exposures covered by a cyber risk insurance policy
Once you have purchased a cyber risk insurance policy, then you are adequately covered against the below-mentioned exposures:
A data breach in the system
This mostly refers to a breach in which your client’s personal information and data may be compromised, or get stolen. You are at a greater risk if you do online business, but even when you don’t your exposure to losing data due to unauthorized employee access or hardware theft still remains.
As per Alberta law, in the event of a breach, notifications need to go out to the affected parties. With cyber insurance, you are saved from losses arising due to this beach, or expenses that you incur for doing security fixes. You are also covered for identity theft protection and protection from possible legal action.
Intellectual Property Rights (IPR)
As long as your business has an online presence, whether through your corporate website, social media presence, articles, or blogs, your exposure remains for risks such as libel, copyright, trademark infringement and defamation etc.
Damage caused to third-party systems
In case you are exchanging data, for instance sending an email to one of your clients, and your email has a virus that crashes their system, or causes damages to it, then you could be held liable for the losses.
Cyber risk insurance protects you against such a failure. Imagine a situation where a fire has occurred, or any natural disaster has struck your business place and your computer systems and the data residing in it are completely destroyed.
Then, while the physical loss of your system hardware would be covered under your existing business liability policy, the data that you have lost as a result of the incident would generally not be covered under that policy.
Hackers asking for money
Sometimes hackers unlawfully access websites and take control of networks and stored data and deny access to website owners or their clients. If such an event occurs on your website and you are asked to pay money to restore your systems to you, then this could cause not only a revenue loss to you, but also damages to your business and your reputation.
Your business could suffer losses from a cyber attack that is caused by phishing, or by a malware or ransom ware. This could be crippling, in case you have an online business and generate revenue by selling your products & service through an ecommerce shop. Cyber risk insurance can provide you protection in such instances.
As you can see from the above instances, cyber risk insurance is a must. However, how much coverage your business needs, is based on your specific situation and can vary depending on your range of exposure. Therefore, it is important to consult a cyber insurance broker who can identify your areas of risk and recommend you a policy that is tailored as per your needs.