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Cyber liability insurance is a complicated, nuanced subject. It can be hard for Indiana business owners to navigate this landscape without having a trusted partner well-versed in cyber liability by their side, particularly in the wake of a data breach.
However, having cyber liability insurance doesn’t make it any less important. It’s a feature that can protect your business from a cyber attack, allowing you to sleep easier if the worst happens.
In this post, we’ll define cyber liability insurance, the potential costs of not having it, and outline exactly why your Indiana business needs it.
Cyber liability insurance is insurance purchased by an individual or business that protects them from financial losses associated with a cybersecurity incident such as a data breach or hacking attempt.
As with any insurance, what type of events and costs are covered will depend on the insurance policy you purchase. Potential costs could include notifying impacted individuals, maintaining awareness of customer credit activity, and any strategic communication or public relations costs. If the policy covers it, cyber liability insurance may also help protect businesses if they are sued due to a cybersecurity incident.
Before making the decision to purchase cyber liability insurance, it’s vital to understand what the costs might be. It’s equally important to understand the cost of not purchasing a plan. Yes, it may represent a significant financial investment in the short term. But the long-term consequences of failing to protect your business and your business data can severely impact your business from a financial perspective.
If your organization suffers from a cyber attack, you may incur significant costs from your response and recovery efforts. Below is a list of potential expenses you may accrue (though this is not comprehensive – there may be others) that cyber liability insurance can help you deal with:
A cyber attack could threaten to stop all business operations. This is an inconvenience to customers as well as your employees. It can be an obstacle for your team members trying to do their jobs. It can also lead to customers losing trust in your company, forcing them to look towards your competitors for their business needs.
Your goal as a business should be to maximize the flow of operations at all times. Cyber attacks can be a major roadblock to that happening.
When a cyber incident disrupts the flow of your business, it can also lead to a halt in dollars flowing into your company. This loss of revenue can be short- or long-term, but either way, that’s money that was coming in that no longer is. Ultimately, your company is only as strong as your ability to drive revenue. When you can’t do that, it is much harder to succeed.
A cyber attack compromising customer or employee information could leave you liable for legal action. Remember that you’re handling your customers’ personally identifiable information (PII), including contact information, social security numbers, and credit card information. You’ll want insurance to help you deal with any legal fees you may accrue after a data breach that could expose this information.
If a cyber attack impairs your hardware or software, that can also disrupt the flow of your business operations. You’ll struggle to keep working and stay connected with customers without equipment. Cyber liability insurance can cover the costs associated with repairing or replacing your equipment to get your operations functional again.
A data breach can lead to a loss of customer trust in your business. To counteract this, it helps to set up a public relations campaign to get ahead of the problem. PR efforts can be costly, but it’s an area worth investing in. It can help you acknowledge the breach and communicate what you’re doing to manage it and prevent future occurrences.
Once a cyber incident or data breach occurs, you’ll want to understand what happened so you can stop the impact and prevent it from happening in the future. To do this, you’ll need to do a forensic analysis of your systems and devices, which can also prove costly. With the right insurance policy, you can offset these kinds of costs. Thorough forensic analysis can be the difference between a cyber attack being an isolated occurrence or a recurring event.
You are legally obligated to notify your customers and, in some cases, the general public about an incident or breach. While this can be a part of your PR campaign, you may need immediate action to notify the appropriate audience. You may have to spend money on outreach to do this quickly and comprehensively. Cyber liability insurance provides protection so that you can make these notifications while continuing to respond to the incident itself.
You can’t completely prevent the possibility of a cyber incident from impacting your business. You can put measures to minimize risk but can’t eliminate the potential altogether. That said, cyber liability insurance is a great tool you can use to help you shoulder the financial impacts of a cyber attack if it does occur.
One challenge associated with cyber liability insurance is how technically complex it can be for those without a technical background to understand cyber liability insurance applications.
The key is to partner with a trusted IT and cybersecurity provider that understands how to help businesses with their cyber liability insurance applications. For Indiana businesses, that partner is Schilling IT. We understand the risks you’re facing as an Indiana business, and we’re here to help pair you with the coverage best suited to your unique business needs.
My experience with Schilling IT has always been excellent. For the most part, Cirro Ramos has been the person to assist me. Cirro is consistently pleasant, knowledgeable, and patient. He never stops until my problem is resolved. I am so grateful that our organization has Schilling IT to help us with our needs!~ Angela Harris
Schilling IT provides a personalized, expert solution for all our IT needs and even more. They have never avoided helping us with anything related to technology even if it may fall outside their typical course of business. They have been the complete solution for anything relating to computers, technology, and IT. Their response time has always been fast.~ VJ Damasius
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Schilling IT is professional and quick to resolve your IT problems. I highly recommend their team!~ Jorie Jones-Prather