Risk & Business Magazine Gifford Associates Spring 2016 | Page 7

R
& Keeping Tabs on Cyber Exposures
B Are You At Risk?
BY: GIFFORD ASSOCIATES

A

nyone who has done business in
the last decade is well aware of the
massive changes that have taken place
in the technological landscape. Major
institutions have fallen as a result of their
being reluctant (or unable) to change
and new companies have risen up by
disrupting the market and usurping
market leaders. One of the byproducts of
advancing technology is that companies
have been increasingly able to take their
operations and data storage to a virtual
space. The issue, of course, is that doing
business online and storing sensitive
customer data on network storage brings
liability concerns and new risk exposures
along with it.

from customers. The lawsuits resulting
from these data breaches have led to
hundreds of millions of dollars being lost
by the offending companies.

Data breaches and the loss of customer
information has almost become a fact of
life. In recent years, we have seen Target,
Home Depot, and a number of other major
institutions lose the personal information
of millions of their customers due to
the actions of hackers. The issue is, just
because hackers were responsible for the
breach, the companies who were hacked
are still responsible. Due to privacy and
consumer protection laws, companies
have a large degree of responsibility for
protecting the information they receive

Cyber policies have become more and
more popular over the years, especially
due to the changes in the digital landscape.
Many companies, mistakenly, believe that
their standard business insurance will
cover them from hacks or other cyber
liabilities. Unfortunately, that is not the
case. While some business policies have
riders attached which may cover some
aspects of cyber exposure, most do not.
And the ones that do simply aren’t going
to cut it in most cases. Cyber policies, on
the other hand, are much more robust.

They protect a company from exposures
arising from a number of sources,
including the following:
• Interruption of business

A full 1/3 of business have suffered due
to cyber liabilities. While pre-emptive
security measures and risk management
steps are important, having a good cyber
insurance policy is just as important.
Even the best companies with the best
IT departments are at the mercy of
individuals who find a way through their
system, and the damage that could be
done by even a small breach of cyber
security could force many businesses to
close their doors for good.

• Loss of data
• Computer fraud
• Cyber extortion
• Loss of funds during transfer
One important thing to note is that cyber
insurance is distinct from technology
errors and omission insurance (E&O).
While E&O is meant to protect companies
who provide software, hardware, and IT
services, cyber insurance is intended to
cover companies who utilize technology
for online retail, collecting customer data
on an internal network, or otherwise use
electronic means for day to day operations.
If you believe your operation may be at
risk of cyber exposures, we would love to
hear from you. Please contact us at (613)
596-9101 for more information.

SPRING 2016

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