Are You Insured Against Cyber-Security Breaches?

Last month, we dedicated a newsletter article to insurance … specifically Cyber Insurance. Because this is such a complicated topic, we wanted to first remind you that no insurance policy covers everything … we’re all still responsible for taking common-sense precautions. But, as criminals grow ever more sophisticated, insurance riders like Cyber Insurance are no longer a ‘nice to have’ cushion; they are becoming the mandatory next step for organizations who hope to compete and do business in the years to come.

Here’s why: if you’re counting on your professional liability policy to cover the impact of cyber crimes against your customers when hackers, criminals, or cyber thieves attack your network, you may be in for a rude surprise.

Professional Liability Insurance (also known as “Errors and Omissions” or E&O insurance) helps protect professional services companies from bearing the full cost of defending against a negligence claim against the resources that work within that organization and the damages awarded in such a civil lawsuit (Wikipedia). But to be properly covered for incidents related to IT network security, AKA a Cyber Liability Claim, businesses also need a Cyber Liability Policy.

In fact, 1 in every 2 cyber liability claims falls back on small-to-midsized business owners!

These claims may stem from issues or incidents like:
  • Theft of their hardware or a lost/stolen laptop or device (14% of claims paid out between 2012 and 2015)
  • A mistake by a member of the SMB’s staff (11% of claims paid out between 2012 and 2015)
  • A rogue employee causing damage upon exiting the company (11% of claims paid out between 2012 and 2015)
  • Theft of money or wrongful data collection (3% of claims paid out between 2012 and 2015)
  • Other (2% of claims paid out between 2012 and 2015)
In all of the examples listed above, The SynchroNet Way would not have prevented the incident. Therefore, we strongly recommend that our SMB clients speak with their insurance agents about obtaining a Cyber Liability Policy of their own. Or, if you would just like to learn more about this issue, like where we can help and where we can’t, please give us a call and we’ll guide you as part of The SynchroNet Way.
So while prevention is ALWAYS the best policy, you still want to hedge your bets and take steps to protect your business, your reputation, and your financial security. Cyber Liability Insurance, along with common-sense precautions, can set the stage for years of future growth. And that’s what we all want.