IT systems play a critical role in the business space. Many businesses use these systems to provide services or information, communicate with prospects and existing customers, as well as store business data, including sensitive data such as customers’ financial information, healthcare information, intellectual property, or personally identifying information. This data is often worth a small fortune. A recent study found that the average cost of a data breach has reached an all-time high of $4.35 million. Most businesses cannot afford to raise such an amount of money. This is where cyber liability insurance comes in handy.
Here is why you should carry a cyber-liability policy
Phishing Causes Major Firms to Lose Millions
Phishing entails cybercriminals posing to be legitimate institutions contacting targets via email, text message, or telephone and then tricking the targeted individuals into supplying sensitive information, such as passwords, banking and credit card details, and personally identifiable information. Cybercriminals then use these data to access accounts which leads to financial loss and identity theft. Phishing attacks cost organizations over $1,500 per employee and about $15 million yearly. Furthermore, the risks are increasing as organizations shift to hybrid or remote work. A standard cyber liability policy can help cover the legal cost resulting from a phishing attack, as well as the cost of data recovery after the breach.
Ransomware Attacks Affect More Than One-Third of Companies
Once Ransomware infects your computer systems, it restricts you from accessing it until you’ve paid a ransom. Usually, ransomware is spread via drive-by downloading or malicious attachments. If you or one of your workers unwittingly visits an infected site or clicks a malicious link, the malware can be downloaded as well as installed without you noticing. In addition to demanding ransom, cybercriminals may also get your data which they can leak, sell to others, or use. One-third of organizations face at least one ransomware attack weekly. Cyber liability insurance can help cover the cost of lawsuits emanating from malware attacks. It can also cover ransom and data recovery, depending on the terms of your policy.
Data Breaches Increase Due to the Growth of the Remote Workforce
A study by the Ponemon Institute and IBM reveals that data breaches are increasingly costing organizations more as employees shift to the remote environment. The report shows that the average cost of a data breach in 2020 was $3.86 million, and in 2021 it rose to $4.24 million. In cases where breaches were partly due to remote work, the cost rose by $1.07 million. For organizations with 81 to 100 percent of workers operating remotely, the average cost of data breaches was $5.54 million. Your cyber liability insurance can help cover the attorney’s fees and judgment resulting from data breaches, as well as the cost of notifying the parties affected by the breach.
Business Email Compromise (BEC) Results is One of the Costliest Losses
A report by the FBI (Federal Bureau of Investigation) shows starting from July 2019 to December 2020, BEC incidents increased by 65 percent. BEC attacks are similar to phishing, but in these cases, cybercriminals directly steal money. For instance, the criminals can pose as a company you regularly work with and send you an invoice with a new mailing address. With phishing, you can lose a huge amount of money in minutes.
DDoS Attacks Cost the Average Business $50K, or More
With DDoS (denial-of-service attacks), cybercriminals flood your site with traffic maxing out your capacity and consequently blocking your normal traffic. On average, DDoS attacks cost small to mid-sized enterprises $120,000 per attack. A standard cyber liability policy can help safeguard your business against the losses resulting from a DDoS attack.
Get the Right Cyber Insurance Policy with Reardon Insurance Agency
Cyber liability insurance is essential for any organization that handles sensitive data. At Reardon Insurance Agency, we will help you get cost-effective and customized cyber liability insurance. Contact us today to get a customized quote.
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