Mackay Insurance Blog
Protect Your Company from Cyber Crime With the Right Business Insurance
The worldwide pandemic has followed us straight into 2021.
While the disruption to our personal lives has been significant, COVID-19 has also caused equal upheaval in business sectors.
Here is one example: many people have now transitioned to working from home indefinitely or even permanently.
Whether you are running your own company from home or working to launch a new business while we shelter in place, it is important to know that the risk landscape for business owners has also changed due to COVID.
While cyber crime was already a top concern for businesses of all sizes prior to 2020, in 2021 it ranks in the top two risks for businesses today.
In this article, our Mackay Insurance brokers walk you through what you need to know and do to protect your startup, solopreneurship, small business or corporation with appropriate cyber liability insurance coverage.
Cyber Crime Is On the Rise In Our New Remote Workforce
The Insurance Bureau of Canada recently reported on how the sharp increase in Canada's remote workforce has delivered a correspondingly sharp increase in cyber crime.
Cyber criminals are targeting businesses of all shapes and sizes with attacks designed to snag sensitive data and exploit it.
Why now, you may be wondering?
The reason is simple.
Most companies have been forced to make rapid pivots to accommodate emergency lockdown measures. As such, employers and employees alike have been making use of personal devices to access secure servers from remote locations.
While this represents a risk management headache for your company, it represents an exciting new opportunity for cyber criminals.
The more devices used to access secure servers to upload, edit, download and share sensitive documents and information, the more vulnerable entry points get created all along the data pipeline.
Skilled cyber criminals can make use of these new vulnerabilities to hack into your networks and leak, steal, compromise or destroy confidential data.
There are two main methods you can use to cope with this unavoidable business risk:
Improve your online security protocols.
Add a cyber liability insurance policy to your business insurance coverages.
For new business owners in particular, it may be helpful to know that the first step to improving your online security is assessing the risks.
The risks you identify will drive the types of security protocols you choose to implement.
As an Insurance company, assessing risks is what our Mackay Insurance brokers do every day! Read on to learn about cyber liability insurance, what it is, what it offers and how to choose a policy.
What Is Cyber Liability Insurance?
While the name makes its purpose seem obvious, it is important to first talk about what cyber liability insurance (sometimes called cyber crime insurance) is and also what it is not.
Cyber liability insurance is an insurance product designed to protect your business from the financial impact of a data breach.
Here are just a few examples of how your company can be negatively impacted financially as a result of a data breach:
- Loss of income.
- Loss of customers.
- Loss of time.
- Loss of reputation.
- Loss of licensing and credentialing necessary to do business in your industry.
What Does Cyber Liability Insurance Cover?
As we mentioned here earlier, cyber liability insurance is designed to cover a standard menu of protections.
But if you need different or extra protections, most insurers provide additional insurance coverages on a per-protection basis.
It is important to know that, like most insurance products, cyber liability insurance often comes with a deductible - an amount your business must pay out of pocket before your benefits kick in.
These are the two types of coverages a basic or standard cyber liability insurance policy will typically offer you. Our Mackay Insurance brokers in Belleville have labeled these below for our business owners:
First Party Coverage
First party coverage reimburses your company for internal operating expenses you incur related to dealing with the data breach.
Here are some examples of how first party coverage can protect you after a data breach:
- Cost reimbursement to restore your electronic systems or compromised data.
- Reimbursement for loss of income while you deal with the breach.
- Cost of extortion payments and expenses related to that.
- Reimburse you for the expense of notifying affected parties.
- Reimburse you for reputation management following the breach.
Third Party Coverage
Third party coverage reimburses your company for expenses arising from claims made against you by those injured through the data breach.
Here are some examples of how third party coverage can protect you after a data breach:
- Claims made by customers whose private sensitive data was exposed or stolen due to the data breach.
- Claims made by regulatory agencies in the form of fines or penalties your company must pay due to the data breach.
- Claims made by customers, vendors, partners or other companies whose private data was made public due to the data breach.
Here, it is vitally important to review the "covered perils" in any cyber liability insurance policy you consider purchasing.
This is because if your company incurs any claims or expenses from cyber crime that falls outside of the covered perils, the policy will not cover those costs.
Do You Need Help Choosing Cyber Liability Insurance in 2021?
Do you work from home, own a home-based business or allow your employees to work remotely? Our experienced Mackay Insurance brokers can help you identify the right level of cyber liability coverage for your company and industry.
Customized cyber liability insurance can help your company pivot safely and securely in the new virtual workplace.
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Get in Touch With Your Belleville Ontario Mackay Insurance Broker
Get in touch with us by phone or email us to schedule a virtual appointment. Due to the current stay at home order, our offices remain closed to walk-in visits until further notice.