Most companies have changed how they operate because of the Internet. A lot of those businesses could have insurance that does not help them with their exposure to the ever-changing world of cyber liability.
A variety of businesses use the Internet in various ways to advertise and run their company. Examples include having a website, accounts on sites like Facebook and Twitter, computers that are connected to the Internet, an electronic credit/debit card payment system, employees like an owner or manager with laptops containing customer info, etc. Some businesses may even sell merchandise online which would require the filling out of credit card information on the website.
Every business tool used to promote and run a company may be needed but a standard or typical commercial insurance or general liability policy may not offer any or enough protection for cyber liability. The more common cyber risks are data/security breach; infringement on copyrights or trademarks; viruses that damage or corrupt data; cyber extortion; worms, hackers and other cyber meddlers; attacks on your firewall and/or network.
Cyber risk coverage may be optional, but businesses should think hard before dismissing it as something that they will never need. Losses from cyber liability can quickly add up. A study performed by the Ponemon Institute in 2009 found that the average loss just from a stolen laptop is $49,276 and the majority of it is due to the breach of data.
Just some of the issues to be concerned about are…
A website maintained by a company could be held responsible/liable for wrongful acts associated with material on their site. This includes, but isn’t limited to: actual or alleged mistakes; misstatements or misleading statements that cause you to infringe on somebody else’s trademark, right to privacy, copyright, and/or service mark. Whoever maintains the website can make that error or a hacker can alter the content of the website.
A computer or computer system with access to the Internet can be a liability with the possibility of someone breaching the system. An unauthorized user could send out personal info stored in the system, put a virus in the system or transmit a virus to somebody else. Any data and/or programs needing to be restored or replaced due to a breach may incur costs to a restaurant.
Cyber extortion happens when a company is attacked or there is a threat of an attack followed by a monetary demand to stop or avoid the attack. One form of this is encrypting the victim’s data and then requiring money before they give them the decryption key. Cyber extortion can also come in the form of threatening to give out personal info of their clients or damaging/destroying records. Incidents of extortion have unfortunately grown and prosecution is made difficult with the criminals often operating outside the country of their victim.
Loss of Income
An e-commerce incident can cause a company to lose business income or extra expenses. One way for this to happen is the computer system being attacked by a virus that damages or destroys information. The business may have to shut down for one or more days to fix the problem and during that time, there might be no flow of income.
The reputation of a business could be in jeopardy if an e-commerce event causes any negative publicity. Being closed for a few days may hurt but slowly losing your clients/customers will hurt worse in the long run.
The risks discussed above may not be everything that can happen to you and your online presence. Keep in mind that Murphy’s Law of “If anything can go wrong, it will” can apply to anyone. Having an insurance policy that protects you from your cyber liability is not something that should be easily dismissed. If you have any questions or concerns, feel free to give us a call at 305-270-2100.
At Filer Insurance, Inc., we have been providing Home, Auto and Business Insurance in Miami and South Florida since 1919. We would very much like to have you as one of our customers. Please give us call or come by our office for a free quote on your insurance.