A look back at cyber liability.
Cyber liability exposure and insurance coverage has had a unique evolution, having only become an issue in recent years. With the rise of technology comes the need to stay safe and protected online as hackers and cyber criminals take to the internet. Cyber insurance first came to life in the 1990s. It was developed to protect the first breed of online companies against instances such as the destruction of digital data, unauthorized systems access, and computer viruses.
Cyber risk initially was a question of network security and data privacy, and it was focused on retailers and financial institutions. Now, credit card data has flooded the market and become less valuable for cyber thieves. It’s not worth their time to steal. As technology grows more sophisticated, so do hackers. Cyber attackers have turned to new, more lucrative tactics to exploit and profit from companies’ network vulnerabilities.
Phishing is now a popular scam that many businesses see – phony emails that try to look legitimate when asking the receiver to wire a sum of money to an external account. They can be very believable imitations of the real deal.
Many cyber liability coverages have become standardized and include public relation expenses, costs to notify potentially affected individuals, and services for the affected individuals. Businesses can use such coverage if there is a breach that hurts their company, clients, or employees.
However, cyber liability is still a bit unusual because it’s a coverage that doesn’t always require an actual loss for there to be potential payments. In the event of a breach or compromise of data, the cyber liability policy may be called on for payments under coverages such as forensic investigation. Believe it or not, but the trigger is not always that there was an actual loss or breach.
Whether you need cyber liability insurance for a start-up or an established small business, the team at Tompkins Insurance Agencies is ready to assist.
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