The answer to the above question is most likely, yes.
It is estimated that less than 5% of business owners carry Cyber Liability coverage. However, the threat of this type of risk grows every single year, and in many cases, could be a more likely occurrence than a fire loss to your business.
Cyber risk insurance, or what is often referred to as data breach insurance, can protect many aspects of your business such as unauthorized access, theft, human error, and ransomware attacks. The typical cost to protect, restore, and secure a single lost/stolen record is $217. A large loss could literally put you out of business.
In May 2017, one of the largest global cyber-attacks took place affecting 200,000 computers with ransomware. Ransomware locks your computer and makes you pay a “ransom” to have access again. The ransom in this instance was $300 per computer.
In another claim scenario, a contractor plugged in a flash drive to a computer controlling a manufacturing production line and accidentally corrupted the computer. The production line was down for 2 days costing over $400,000 in lost revenues.
Without Cyber Liability coverage, no coverage would exist for either scenario. The good news, most insurance companies offer an endorsement or a standalone policy you can purchase to make sure you are properly covered.
If a cyber security endorsement is available this may be the cheaper way to go, but coverage limits could be low, and they may have specific exclusions. A stand-alone cyber risk policy would offer higher limits, and fewer exclusions, however, will have a higher cost. The best thing to do is speak with your insurance agent to help you determine what cyber insurance coverage is best for your business.
If you have any further specific questions about Cyber Liability Coverage, contact us here at Homestead, we will be glad to assist you.