Risk & Business Magazine JGS Insurance Magazine Fall 2019 | Page 7
DANGER OF CYBER LIABILITIES
THE UNSEEN
DANGER OF
CYBER LIABILITIES
D
oes a substantial portion of
your business operate utilizing
some form of technology?
Do you store customer and
business information on your
computers? How about your technicians or
employees? Do they use their phones to help
communicate important details about work?
Chances are, the answer to the majority
of these questions is a resounding “yes.” A
common misconception of business owners is
that if they are not a tech company or gigantic
corporation, then they do not have cyber
liability exposures. Well, if you answered yes
to the above questions as most businesses
do, then you do have cyber exposures. That
shouldn’t be too much of a surprise, especially
considering how quickly new technologies
are coming out to simplify business. Every
one of us has been there at some point,
whether it’s storing purchase orders in a
database or utilizing software-as-a-service
(SaaS) solutions to solve problems at work.
Technology has made life easier in
innumerable ways. Unfortunately, nothing
easy comes without a price. When it comes
to technology, that price is a dramatically
increased liability pool. If you follow the
news, it would be hard to miss some of the
consequences of cyberattacks and cyber
liabilities in general. It seems like every day
a company faces a huge breach, whether it’s
Target in 2013 (which affected 41 million
people and ended up costing the company
$18.5 million) or even Equifax in 2017.
According to a 2017 study sponsored by
IBM and conducted through the Ponemon
Institute, the average total cost of a data
breach in 2017 was $3.62 million.
There is a light at the end of the tunnel,
however. Cyber insurance coverage is
specifically designed to deal with data
breaches and cybercrimes from both a
regulatory and a civil liability standpoint.
Many business owners believe general
liability insurance can cover some of the
damage stemming from cyber incidents.
Unfortunately, that isn’t the case. Cyber
insurance will mitigate liability which
involves sensitive customer information and
help deal with the consequences of it.
Here are a few examples of what cyber
policies generally cover:
• Legal fees and expenses from civil or
governmental entities
• Notification of customers (many
regulations require the notification of
customers in the event of a data breach
that involves personal information)
• Repair/replacement of damaged
equipment and systems
• Data recovery from compromised units
• Restoration of customer identities
• Public relations (data breaches are often
accompanied by a decreased brand
opinion)
• Business operations (to keep your
business running while things are being
fixed)
Now it is time to ask again,
IS YOUR BUSINESS
ADEQUATELY
PROTECTED AGAINST
CYBER LIABILITIES?
Cyber attacks are becoming more and more
prevalent, increasing in frequency right
along with the technology that makes them
possible. Insurance is just one piece to a larger
puzzle. Ask for a comprehensive review of
your cyber liability exposures prior to your
renewal, as an uncovered claim could spell
the end of your business.
BY: CHASE HELWIG, CLCS
ASSISTANT VICE PRESIDENT
JGS INSURANCE
Having spent seven years working
in the home improvement field, it
was only natural for Chase Helwig
to focus his insurance expertise on
the construction industry. Firsthand
knowledge of workplace occurrences
and operations allow Chase to provide
in depth analysis to identify exposures,
while providing unique comprehensive
solutions suitable for each individual’s
needs.
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