Protecting Your Company before a Cyber Breach


Moira Gettens, Oswald Companies
February 2017

Anthem, Home Depot, Target and many other large companies across the world have had one issue recently in common. They have fallen as victims to cyber breaches. We now see the topic daily in the news. Cyber Liability arises from the loss of or unauthorized access to private and/or confidential information in care, custody and control of you and your business.

Today you can protect your business by purchasing Cyber Liability insurance coverage. Cyber Liability insurance coverage applies to damage caused due to the loss of personal identification information, confidential business information as well as protected healthcare information. This insurance coverage responds to exposures and costs that include cyber risk management and post incident response. The most common data and server breaches occur when an unauthorized person gains access or hacks into a computer system. Not only can 'hackers' cause harm, but employees with information access could also send stolen data to an unauthorized location. Also, third party service providers can be connected to your Cyber Liability coverage.

When selecting Cyber Liability insurance coverage, there are options for first party coverage and third party coverage. First party coverage encompasses losses and expenses incurred during an attack which include event management expenses, notification costs, credit monitoring and restoration services, legal assistance, forensic investigation costs and the ability to hire a public relations firm to minimize future damage. The costs incurred to investigate and terminate an extortion threat are typically included in this coverage as well as lost income from business interruption. On the other hand, third party coverage provides for damages suffered by others. This includes network security liability coverage for damages and defense costs resulting from a breach in network security. Privacy coverage is also incorporated for failure to protect or wrongful disclosure of personal information as well as costs resulting from civil, administrative or regulatory proceeding alleging violation of privacy laws. Injuries such as libel, slander, defamation and copyright are usually also insured with this coverage.

Cyber Liability coverage provides more than insurance. Once a breach has been reported, your Cyber Liability insurance carrier provides a post incident path. A PR firm should be hired to assist with reputational consequences including, internal and external reputation risk and contract and business earning outcomes. Proper notification and call centers for those affected could be necessary along with administering credit monitoring services, paying fines and penalties and reconstruction of data.