As more and more aspects of business are carried out and stored using the internet and cloud-based technologies, potentially sensitive information becomes more vulnerable to the threat of cyber attacks and security breaches that take place electronically. Such attacks can be costly, both immediately and in the long term, and unless you specifically have a cyber liability insurance plan, your enterprise could be forced to shoulder the entire financial burden.
Cyber attacks can be carried out by individuals, companies, activist groups, or even terror organizations. The type of threat posed depends largely on the type of business you own. Information such as credit card numbers and pin numbers could be stolen for financial gain, sensitive information could be made public for political reasons or sold to third parties, or your business’s operations could be interrupted by a computer virus or ransomware.
The costs of a cyber attack can be immense: even the sole task of notifying consumers that their sensitive information has been compromised (as in, in many cases, legally mandated) can be lengthy and expensive. Furthermore, you could become the subject of lawsuits for financial damages as well as reputational damages, if the attack involves spreading messages through your website or social media accounts. Operations could be interrupted as you attempt to correct the problem, and your reputation could be irreversibly damaged.
Liability: Who’s Responsible?
As the use of technology in running a business becomes more and more widespread and advanced, laws cannot evolve quickly enough to keep up with the changing ways in which we handle sensitive information and financial transactions. As a result, the issue of liability following a cyber attack is full of gray areas, and is being decided in courtrooms every day. If your business is a franchise, for instance, it may be unclear whether the responsibility for a such a security breach would fall on you or the larger corporation.
One way to protect yourself and your business is to keep up-to-date with the latest technology and risk management approaches within your field. As EMV (chip) card reader machines become the higher-security norm for retailers, you are far more likely to be liable for a security breach if it is connected to using older, card-swiping technology.
The most important thing for you to know is that a general liability commercial insurance plan will not protect you in the event of a cyber attack. Unless you specifically have cyber liability insurance, you leave your enterprise unprotected from incursions.
At Lowdermilk & Associates, we are committed to assisting our Denver, Colorado clients in choosing the best commercial insurance plan to meet their unique business needs. Let us help you assess your options to ensure that you are protected from every type of threat, including cyber crime. To learn more, get in touch with us to schedule an appointment at a time that is convenient for you.