CYBER RISK INSURANCE: WHY SIMPLY HAVING IT MAY NOT BE ENOUGH
As businesses grow and evolve in today’s competitive landscape, many are finding that having a rational and comprehensive plan for responding to privacy crisis issues such as data breaches and cyber crime is of paramount importance. Cyber risk insurance coverage can play an integral part in how a company manages a data breach, however simply having coverage may not be sufficient to properly protect a business from all of the perils and costs associated with cybercrime. As the field of cyber risk insurance matures, policies are becoming more complicated, highly specific and customisable. It is critical that companies understand the intricacies of cyber risk insurance policies to ensure that they have the protection they actually need, and are not paying for unnecessary coverage.
Recently, several large companies such as Sony, Target and LivingSocial have been in the news for being the victims of data breaches in which personal information of their customers, employees or both has been stolen from their databases. Although these high profile cases consistently get more media coverage than smaller breaches, according to a recent study, the majority of worldwide data breaches actually occur at small companies (‘2013 Data Breach Investigations Report’, Verizon Risk Team) Increasingly, businesses of all sizes are realising the extent to which a data breach can harm their profitability, and many are taking steps to mitigate these risks by purchasing cyber risk insurance to supplement their existing CGL, E&O and general theft policies.
Apr-Jun 2014 Issue
Governo Law Firm LLC