Last month, we dedicated a newsletter article to insurance ... specifically Cyber Insurance. Because this is such a complicated topic, we wanted to first remind you that no insurance policy covers everything ... we're all still responsible for taking common-sense precautions. But, as criminals grow ever more sophisticated, insurance riders like Cyber Insurance are no longer a 'nice to have' cushion; they are becoming the mandatory next step for organizations who hope to compete and do business in the years to come.
Here's why: if you're counting on your professional liability policy to cover the impact of cyber crimes against your customers when hackers, criminals, or cyber thieves attack your network, you may be in for a rude surprise.
Professional Liability Insurance (also known as "Errors and Omissions" or E&O insurance) helps protect professional services companies from bearing the full cost of defending against a negligence claim against the resources that work within that organization and the damages awarded in such a civil lawsuit (Wikipedia). But to be properly covered for incidents related to IT network security, AKA a Cyber Liability Claim, businesses also need a Cyber Liability Policy.
In fact, 1 in every 2 cyber liability claims falls back on small-to-midsized business owners!
- Theft of their hardware or a lost/stolen laptop or device (14% of claims paid out between 2012 and 2015)
- A mistake by a member of the SMB's staff (11% of claims paid out between 2012 and 2015)
- A rogue employee causing damage upon exiting the company (11% of claims paid out between 2012 and 2015)
- Theft of money or wrongful data collection (3% of claims paid out between 2012 and 2015)
- Other (2% of claims paid out between 2012 and 2015)