Do I Need Cyber Liability Coverage?

April 24th, 2014

Cyber attacks have become a hot topic these days, not just in the insurance world, but in media coverage both on and offline.

In fact, cyber security has become major news, with recent attacks on Alberta Health Services and the Target retail franchise. Even more disturbing is the recent Heartbleed Bug, which crippled websites including the Canada Revenue Agency and Yahoo.

These kind of cyber security issues have created a great deal of panic among business owners and organizations. Fortunately, there is a way to protect yourself in the event of a cyber attack. The following blog offers information on cyber security precautions you can take. For additional information on the risk of a cyber attack, you can also Ask One of Our Insurance Experts.

What is a cyber attack?

No doubt you’ve spent time surfing the net, perhaps you’ve even bought a few things on eBay or Amazon. Maybe you’ve signed for a webinar or regularly participate in social networking sites like Facebook, Twitter or LinkedIn. Each of these transactions can pose a cyber security risk to you as an individual and to the company or organization you’re interacting with.

A cyber attack can be as simple as the transmission of a computer virus to another party, a violation of privacy policies or the theft, corruption and destruction of data. A cyber attack can also consist of more sophisticated activities like hacking or denial of service attacks.

You’re probably wondering how this happens so easily and so frequently. Typically, in order to take part in most online activities, you must share personal information, such as your name, address, email, date of birth or credit card details. When the transaction occurs, and your information is collected and stored, there is a risk that the data can be exposed either by theft of information through hacking, computer viruses or fraud.

For the victims of a cyber attack, it can be a frightening and violating experience. The good news is that most companies are upping their protection by implementing the most sophisticated security infrastructure available. These same companies are also covering all the bases by electing to put in place cyber liability coverage. Traditional commercial insurance policies were originally designed to protect physical assets, not virtual property like data. Cyber liability coverage, however, is a way to protect your business against cybercrime, cyber terrorism and general cyber attacks.

Does my company need cyber liability coverage?

In most cases, the short answer is a resound “YES!” If you are collecting and storing personal information (be it for clients, patients, vendors etc.) then you should definitely consider cyber liability coverage to protect you in the event of your data and online security systems being compromised.

It’s also important to note that it’s not just large companies who are at risk of a cyber attack. Sure, it’s typically high-profile cyber security stories that end up making the headlines, but smaller businesses have also come under attack in recent years. For a visual depiction of how a cyber attack can threaten your business or personal systems check out our helpful infographic.

 
This post is advisory in nature. It is offered as a resource to be used together with your professional insurance and legal advisers in developing a loss control program. This guide is necessarily general in content, and intended to serve as an overview of the risks and legal exposures discussed herein. It should not be relied upon as legal advice or a definitive statement of law in any jurisdiction. For such advice, an applicant, insured, or other reader should consult their own legal counsel. No liability is assumed by reason of the information this document contains.

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