What do Kmart, American Express, Target, Home Depot, and eBay, have in common? They are all part of massive data breaches where hackers stole and exposed customer records for monetary gain. The frequency of these cyber-attacks has increased year over year which has put Cyber Liability Insurance in the spotlight.
Odds are that if you’re reading this post, you most likely have a LinkedIn account. In May of this year, hackers stole 167 million (yes, you read that right) accounts from the social media giant. This left Cory Scott, LinkedIn’s Chief Information Security Officer, with a logistical nightmare trying to sort out the mess.
In addition to LinkedIn, Target was unfortunately struck by a similar breach. 40 million credit cards were compromised and 70 million accounts were hacked.
Yes these are global brands, but small businesses also see breaches on a consistent basis — really any company that relies upon technology is vulnerable to an attack.
If your business is hacked, having Cyber Liability Insurance can greatly help you through this tough time. In this post, we’ll quickly explain the scope of a cyber policy and how it can help you in the event of a hack.
What Cyber Liability Insurance Covers
Cyber Liability Insurance is a combination of four components:
- Errors and Omissions
- Media Liability
- Network Security
- Privacy
Errors and Omissions: E&O covers claims arising from errors in the performance of your services. This can include technology services, like software and consulting, or more traditional professional services like lawyers, doctors, architects, and engineers.
Media Liability: These are advertising injury claims such as infringement of intellectual property, copyright/trademark infringement and libel and slander. Coverage here can extend to offline content as well.
Network Security: A failure of network security can lead to many different exposures, including a consumer data breach, destruction of data, virus transmission and cyber extortion. Network security coverage can also apply if you’re holding trade secrets or patent applications for a client, and that information is exposed due to a failure of your security.
Privacy: Privacy doesn’t have to involve a network security failure. It can be a breach of physical records, such as files tossed in a dumpster, or human errors such as a lost laptop, or sending a file full of customer account information to the wrong email address. Companies have also faced liability from returning a photocopier with a hard drive that contained customer tax records.
As the holiday season approaches and online sales increase, we at Chase Clarke Stewart & Fontana, recommend that businesses, large and small, make sure they know if they’re covered in the event of a hack. Fill out the form or give us a call at 1.413.788.4531 to talk to a friendly representative.