These days most every business, no matter how small or what
kind, is in the business of collecting data and information about its customers. We do this for many reasons, from collecting
payments from clients to establishing ways to stay in touch with them and help
generate repeat business with them. And
these days there are so many client data driven business applications for smart
phones and tablets and computers that data collection processes are now showing
up in even the smallest organizations. So
what can you do to keep this data safe, and by implication, protect the privacy
of your clients? What will be your
responsibilities to them if your database is hacked or stolen? Have you tried to understand and measure the
costs to you and your business if you have to pay for the losses and damages
from a cyber-intrusion into your network?
Cyber attacks can happen fast and leave behind long lasting
negative effects for your company. A
data breach can be caused by something as simple as misplacing or losing a
laptop computer, smartphone or a tablet computer. And while this sounds a bit scary and
overwhelming, the good news is that the insurance industry has recognized this risk
and has begun to offer insurance protections for this type of loss. I
have listed below a short list of reasons why you need cyber liability
insurance coverage in place for your business.
Here are 5 top reasons why you should purchase a cyber liability
insurance policy for your company:
1.
Breach of
Network Security/Privacy - While
we tend to think of a data breach affecting our clients, it can also involve
the loss of the personal information of your employees of information about
your vendors. You could also lose
company data for your own company such as proprietary information; let’s call
it the secret sauce to what makes your business unique and successful.
2.
Data Recovery Costs – Among the many costs of
recovering from a cyber theft will be the costs to recover data that is
stolen. You may have to spend quite a
bit to pay for your clients’ or your employees’ costs to rehabilitate their
individual financial identities. This could
be a very long and expensive process, depending on what damage has been done by
the thieves.
3.
Breach Notification – You will be required to
notify anyone who might be affected by the data breach. The costs of communicating with so many
people at one time could be quite expensive for your company.
4.
Regulatory Fines/Penalties – Different
governmental entities may have fines that you will have to pay as a result of
the cyber theft of your data.
5.
Your Loss of Income – Don’t discount the damage
to your business of this type of theft.
Your reputation will need to be repaired and this will take time. In addition, the time and effort that you
spend in recovering from a data breach loss could completely cripple your
ongoing operations and generate a huge loss of income for you.
Cyber liability losses to businesses are increasing in both
frequency and scope. Because this
liability exposure is so new, many businesses have overlooked the negative
financial impact that this kind of loss might have on their organization. My advice is that you sit down with your
insurance agent and take as much time as is needed to make sure that you have
the cyber liability coverage in place that you feel is required to adequately
protect the health of your organization.
Here at Clinard Insurance Group, located in Winston Salem,
NC, we want all insurance buyers to be informed consumers. We insure thousands of small businesses all
across North Carolina, South Carolina, Georgia, Tennessee and Virginia. If you need help with your small business
insurance, or if you want to explore cyber liability coverage in more detail,
please feel free to call us, toll free, at 877-687-7557.
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