Since 2020, we’ve seen a huge spike in cyberattacks and insurance claims. The time to make sure you’ve got the right coverage is now. Learn how much you need.
As the general security needs of businesses increase, so does the need for you to have good cyber liability policies. In fact, this is becoming just as important as worker’s compensation, general liability, errors and omissions, or directors and officers policies. While it must be stated that we are not insurance specialists, we have learned a thing or two about cybersecurity and want to share a few tips with you.
First, the minimum cyber liability policy coverage amount we recommend is 1 million. Some businesses have policies that cover just $100,000 or $250,000, which may seem like plenty. But if a security breach occurs, your claims can easily exceed these amounts. We have been brought in to help with situations where hundreds of systems had to be shut down, and forensics companies, attorneys, negotiators, and many others had to become involved to resolve a breach. Some of the problems can go on for days and weeks, resulting in claims, ransom payments, and fees that exceed even 1 million.
For this reason, we also recommend that you work with an experienced agent to evaluate your revenue, production loss values, risk, and many other aspects of a good coverage solution. It is important to have an agent who knows what to look for in a policy that aligns with your business. They should be able to take your requirements to the larger marketplace to ensure you have the best policy for your investment. Your agent should also have a strong relationship with the carrier because they will inevitably need to help push claims along.
Since November of 2020, we have seen an exponential spike in the number of attacks, breaches, and claims. This is going to result in a global increase in premiums and likely a reduction in coverage. Be sure to align your budget with what your agent is seeing in the marketplace.
Additionally, your IT team and your agent should work together to ensure you are abiding by the policy requirements to avoid having a claim denied. Some of the latest policies require multi-factor authentication and other precautions to be in place for the policy to pay out. Failure to maintain policy standards can result in a catastrophe for any business.
While you may not be able to prevent a security breach entirely, you can definitely minimize its impact by taking these steps to protect your business.
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