Transfer Your Risk: The Case for Cyber Liability Insurance (If You Can Still Get It)
In today’s business world, data breaches are becoming more and more common.
In fact, a study by the Ponemon Institute, a premier research center based in Michigan, found that the average cost of a data breach is now $4.35 million – a whopping 12.6% increase from one year ago.
To top it off, the growing number of privacy laws and regulations will increase the cost of a data breach.
So, what can businesses do to protect themselves? One option is to purchase cyber liability insurance.
What Is Cyber Liability Insurance?
Cyber liability insurance is a type of insurance that helps businesses cover the costs associated with a data breach. This includes the cost of investigating the breach, notifying customers, and providing credit monitoring services. It can also help cover the cost of lawsuits and settlements
Is Cyber Liability Insurance Worth the Investment?
The answer to this question depends on a number of factors, including the size of your business and the industry you’re in. However, one thing is certain: if your business suffers a data breach, the cost of not having cyber liability insurance will be much higher than the cost of having it.
How You Can Reduce Your Risk of a Data Breach without Cyber Liability Insurance
There are a number of steps you can take to reduce your risk of a data breach, even if you don’t have cyber liability insurance. These steps include: encrypting all sensitive data, implementing two-factor authentication, and regularly backing up your data.
Can You Get Meaningful Coverage
Recently, Mondelez International settled its lawsuit against Zurich American Insurance Company, which it brought after the insurer refused to cover the snack giant’s $100-million-plus cleanup bill following a 2017 Cyber Incident.
The insurance industry and legal experts watched this lengthy battle over a claim and what an “act of war” means and if a “cyber war” could invalidate an insurance claim, and if insurance carriers should pay for damage inflicted during a cyber incident led/supported by a nation-state.
Conclusion
Data breaches are becoming more and more common, and they are costly—the average cost of a data breach is now $4.35 million and regulations will increase this cost.
Businesses need to take steps to protect themselves, and one way to do this is by purchasing cyber liability insurance.
Cyber liability insurance helps businesses cover the costs associated with a data breach, including investigation costs, customer notification costs, credit monitoring services, lawsuits, and settlements.
The cost of not having cyber liability insurance will be much higher than the cost of having it if your business suffers a data breach.
There are also steps you can take to reduce your risk of a data breach without cyber liability insurance, such as encrypting sensitive data and implementing two-factor authentication.
Being properly prepared to defend your network is the best investment you can make to ensure your business is able to continue operations after an incident while minimizing your cost of recovery.
Insurance may no longer be your last line of defense.
Recommended Resources
Suggestions to Learn About Your Cyber Risk Governance…
- Read about Netswitch’s Security and Risk Assessment (SARA). We help you in less than a week.
- Join us at an upcoming LinkedIn Live Event where they will discuss how you can change the narrative around GRC in your organization. Watch Previous Events HERE.
- Request to join other risk professionals in our Cyber Risk Governance LinkedIn Group – The largest LinkedIn Group about Cyber Risk and Governance JOIN.
- Join Netswitch on
LinkedIn – Netswitch Technology Management
Podcast – Cybersecurity Chronicles
Videos – Netswitch on YouTube