Risk & Business Magazine Knight Archer Insurance Fall 2015 | Page 7

Online Security Cyber Liability, Insurance and Your Business BY: CHALEN SCHNEIDER, KNIGHT ARCHER COMMERCIAL INSURANCE [email protected] T he modern business world has a number of risks and liabilities which simply didn’t exist in the past, especially when it comes to computers and mobile devices. Many small businesses, however, either do not know about or choose not to take advantage of the types of insurance which cover those devices and online security situations. Cyber liability insurance is one of the best ways to help offset the damage that can be done as a result of cyber attacks or security breaches. With the rise of many data privacy laws in Canada like, PIPEDA and CASL it is more important than ever before that businesses keep their data safe from prying eyes. The flip side of that coin, however, is that the protection of data exposes the business to the risk of it getting out into the public and, thus, breaking the data protection laws that have been set in place. Cyber insurance, thus, has become more and more common. It helps to close the coverage gap that exists between the current needs of companies and the traditional coverage that they already have. This type of insurance also helps to mitigate some of the expenses of data breaches, should they occur. Further, they help to make resources available which can assist companies in their response to a data breach. One aspect that many business owners never consider is whether or not to allow their employees to use their own devices, rather than having them be furnished by the company. At first glance, this idea would seem to be great, right? The company saves money, the employees have less hassle carrying around multiple devices, etc. It seems good all around. Until, that is, you consider the potential risks involved. For one thing, devices employees bring in from home may not be compatible with the systems that are being used in the company. Further: This opens the door for an enormous security risk. Another situation to consider is whether or not your company outsources any of their storage or data processing needs to outside vendors. If so, then your company is still going to be liable for anything that happens resulting from the actions of those vendors. Thus, there is, again, a need for the inclusion of some sort of cyber liability insurance in order to mitigate potential losses stemming from actions of the third parties with which you do business. Knight Archer strongly recommends consulting a broker in order to help determine what risks and liabilities your company might be facing. It doesn’t matter if your company is large or small, the risks are the same, and the damage that can be done to your company by holes in your coverage is just as detrimental to your future growth. For more information about cyber liability insurance or to get a better understanding of the types of risks your business might be exposed to, you can contact me at [email protected]. Chalen Schneider is a 16 year veteran insurance professional who has provided valuable risk and insurance advice to the Education, Government, Construction and Transportation sectors. TM FALL 2015 RISK & BUSINESS MAGAZINETM 7