Cyber liability coverage (for data breaches) has evolved from just insurance for information technology companies to coverage that nearly every kind of business should have - if they don't already. From retailers, banks, contractors, distributors, restaurants and medical offices, many companies are unaware of the severe data breach exposure they face. In short, any business not making an effort to protect personal private information is seriously out of step with the emerging landscape of privacy laws.
Cyber Liability Misconceptions
- Only large retailers need the coverage. Wrong- Businesses with fewer than 50 employees are the latest targets of cyber thieves. Often small businesses fail to have adequate protection making them an easy target. Companies with less than 75 employees endured 70% of the total attacks.
- Traditional business liability insurance will cover cyber liability. Wrong- Traditional liability insurance does not cover your business for internet exposure or data breach.
- If we have a breach, it is not that big of an issue. Wrong- A cyber breach can cost tens of thousands of dollars. The average notification cost per exposed record per person averages $250. All states now have laws that make it the responsibility of the company to provide indemnity recovery help. You may end up having to secure identity theft insurance for every breached record.
- My company does not store credit card information; therefore, I don’t have any risk. Wrong- Confidential information is defined as any personal information including addresses, email, social security numbers, Federal ID numbers, family member information, bank information and more.
- We don’t use the internet for business and therefore don’t have any exposure. Wrong- According to the 2011 Data Breach Investigations Report by the Verizon, 9% of data breaches that occurred were started by an employee or other internal sources.