In the 21st century, computers are essential not just for one’s personal life but also for business. The rise of computers in the 1980s and computer networks in the 1990s revolutionized the way data was shared, stored, and processed, and business has never been the same since.
However, as technology evolved, so did threats. Computer crimes are now one of the fastest rising threats to businesses today. This is especially true during the COVID-19 pandemic as traditional physical crimes drop and digital crimes rise. It’s one of the reasons why cyber liability insurance is something a business owner should always keep in mind.
What Is Cyber Liability Insurance?
Traditional liability insurance protects businesses from the financial damage that may arise as a result of physical harm or destruction. An example of liability insurance coming into play is when someone in a shopping mall slips and falls from an escalator and attempts to sue the property managers for negligence.
Cyber liability insurance offers this type of financial protection within the digital realm. Data is precious, and in many instances, it is kept private in order to adhere to laws, protect an individual’s rights, or stay competitive in one’s industry. Computer crime is all about invading networks to gain access to that information illegally.
What Happens In A Cybercrime?
Depending on the goal, the outcomes for cybercrimes can vary. Corporate espionage, for example, is concerned with seeing information to eliminate an entity’s competitive edge. Some cybercrimes are deliberately destructive, where the goal is to gain access to information, delete it, and deny the owners access to it.
Most cybercrimes, however, are about profit. One technique is known as data ransom, where legitimate owners and operators lose control of their network and are locked out of the data they should have access to. It is only after they pay a fee or ransom that the hostage data is released. Another tactic is to steal confidential information such as credit card numbers and bank account information and sell the data to others who may want it on the black market.
How Does Cyber Liability Insurance Help?
Depending on the outcome of cybercrime, a business may find that confidential data has been compromised or some hardware has been rendered inoperable. Cyber liability insurance can provide financial coverage for the recovery process.
You may need funding to repair or replace compromised systems. Funds may be required for the restoration of victims’ personal identity data. They can even be used toward data recovery if the information is destroyed or made inaccessible. As with any insurance policy, there are deductibles to consider as well as specific conditions for qualifying, such as whether to cover employee error or deliberate and malicious actions only.
If you have sensitive, valuable data and you are connected to a computer network, you may be at risk for cybercrimes. Should you need more information on protecting yourself, we can help. Contact Panorama Insurance Agency to ask about digital and cyber liability coverage.