Let’s talk about about what small business owners can do to protect themselves from this ever increasing category of risk.
Q: What about a commercial general liability policy, doesn’t that cover cyber crime?
A: Definitely not. The main focus of a Commercial General Liability policy it to cover body injury or property damage to a third party. There is no coverage for claims due to a loss of data or breach of privacy.
Q: Give us an example of a cyber liability claim.
A: Absolutely, an employee’s company laptop is stolen from a vehicle. On that laptop is a customer database containing physical and virtual addresses, phone numbers and personal financial information. This information was used in an identity theft crime. The victims of the identity theft then sue for recovery of their costs in restoring their identities.
In addition to providing coverage for claims made against the business, cyber coverage could also respond for the costs incurred by the business itself. This could include restoring and securing data, business interruption, customer notification and credit monitoring to name a few.
Q: So how much is this coverage and what limit of coverage is available?
Miller Insurance has a range of companies that can provide cyber coverage as an extension of your existing package policy, usually with a limit of $25,00 to $50,00. Premiums are based on the type of business and the limit of coverage you require. As this may not be an adequate amount of coverage, increased limits of $100,000 up to $5,000,000 are available.
Q: How do I know if I have Cyber exposure?
A: Chances are if you are dealing with customers, you have an exposure. Simply losing a smartphone can lead to a substantial breach depending on your business and clientele. Contact your broker today and find a plan that fits your needs.
Q: What does this protection mean to the business owner’s clients?
A: When a cyber breach occurs the business is not the only victim. Normally the compromised information is stolen with malicious intentions. Victims of identity theft now spend an average of 600 hours (normally over the course of years) recovering from this crime. The time spent would equal somewhere in the range of $16,000 in unrealized or lost income for the average person. By purchasing proper cyber protection it indicates to your customers that you care about them and are willing to protect them from something that is normally outside their control.
As always, having a conversation with your broker about your insurance needs and concerns is the best way to ensure you are covered for potential losses. Remember if it is worth protecting, it is worth talking about.