What exactly is Cyber Insurance?
Cyber-insurance is an insurance product offered and used to protect businesses and individual users from Internet-based risks, and more generally from risks relating to information technology infrastructure and activities.Risks of this nature are typically excluded from traditional home insurance and commercial general liability policies, or at least not specifically defined in traditional insurance products. Although personal cyber insurance policies are still in their beginning stages, some insurance companies may offer cyber protection as an add-on to a home insurance or identity theft protection policy. Cyber insurance is more commonly used in commercial insurance policies with companies that hold a lot of data in online resources. It would still be considered an add-on from their general liability policy.
That definition sounds a little intense, so let’s break that down some more. The World Wide Web is an information system containing hypertext linked documents that you can access and then jump around the documents by being connected to the internet and it is more commonly called the Web. Cyber activity is anything that you do while being connected to the internet on the web. Nowadays, you can do a lot of stuff online like shopping, banking, networking, and data storage.
When you shop online you might put in your bank card information or use a secure PayPal account which alternately has your bank account information anyway. When you bank online a lot of personal information is at risk including your account numbers and your social security number. Networking may involve sharing personal information like phone numbers and locations of your place of employment or even your home. We would consider social media as a form of networking as well since you are staying in touch with family, friends, and associates. Social media is where you may share even more personal information like photos of yourself and family, status updates about what you’re doing or attending, and other things. Many businesses are also turning to the virtual world using portals where information can be stored such as your place of employment or even your healthcare provider.
Why should I have Cyber Insurance?
As the world transitions into more and more digital technology use, the amount of personal information floating throughout the web also increases. Having cyber insurance is a great way to help keep your information safe and protect yourself and your company from vicious cyber crimes and scams. Cyber insurance would be beneficial to have as coverage for losses such as data destruction, extortion, theft, and hacking of your accounts. These cyber scams can happen to individuals, small businesses, and large businesses.
Examples of these cyber scams would include the data breach that affected over 40 million Target shoppers during Christmas of 2013 where credit card and debit card account numbers were stolen. Another would be the cyber attack on Equifax where over 143 million U.S. citizens confidential information was accessed including social security numbers and driver’s license numbers.
What to look for in your policy
If you decide that obtaining cyber insurance is the right choice for you, Keystone- Deibler Straub & Troutman has provided a short list of key elements that would be beneficial for your personal and commercial policy to have.
- Forensic Expenses. You have determined that data has been compromised and need to investigate what happened, how it happened, and what information was accessed. The expense to hire an outside forensic team for discovery is covered.
- Legal Expenses. You will need legal representation in order to determine the scope of the federal and state notification requirement breaches. You will also need legal counsel to defend you in the event a suit is filed against you.
- Regulatory Fines and Penalties. The government will do their best to find a way to fine you for a breach of data.
- Extortion Expenses. Many cyber criminals will demand some type of extortion or ransom in order to get control of your data again and a good insurance policy would cover these costs.
- Credit Monitoring and ID Theft Repair. While not legally required, it is generally agreed that offering these services to the affected parties will reduce potential legal liability and is considered the right thing to do.
At Keystone- Deibler Straub & Troutman, it’s our goal to provide you with the greatest service in the area. If you are located in Elizabethville, Halifax, Millersburg, Upper Dauphin, Line Mountain or the surrounding area we would love see how we can assist you. Give us a call or check out our online quotes!