For many businesses today, the data they work with, generate, store, and process is their most valuable asset. Hacking, phishing, data breaches, and other types of "cyber crime" can put data at risk, costing your business lost productivity and assets. In cases where personal information is breached, cyber crime can also put you at risk for lawsuits and damage your business' reputation.
A relatively new type of business insurance is targeted to business owners who are concerned about "cyber crime." Cyber crime has been on the rise in recent years — internet security company Symantec reported 312 security breaches in 2014, a 23 percent rise from the previous year, with an average of 1.1 million identities explosed per breach. Four of those breaches exposed more than 10 million identities each. These attacks negatively affect businesses in terms of time, money, and reputational damage.
Cybercrime insurance is available as a basic policy that is specifically written to protect your business in the event it falls victim to a data breach or other event that puts sensitive data in jeopardy. Coverages may include the following:
- Expenses related to providing legally-mandated notice to everyone affected by the data breach. This can involved sending out written letters, setting up a call center, providing free credit reporting services, etc.
- Legal expenses relating to a lawsuit regarding the security breach
- Payments made to cyber extortionists who held your data or website hostage
- Costs for tracking down and persecuting cyber criminals who attacked your business
- Network and data restoration costs
- Replacement of income lost due to the cyber attack
- Professional crisis management and public relations help needed to repair your company's reputation
- Protection against data breaches that are the fault of a third-party service provider you work with
Do I need cyber protection?
If your business operates in the following industries or in a field where handling large amounts of personal data or having a strong Internet presence is required, talk to your insurance agent or broker about your need for cybercrime insurance.
- Information technology
- Professional, financial, health, or legal services
- Businesses with a large number of mobile employees
First Commonwealth Bank and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.