Risk & Business Magazine Sterling Insurance Spring 2017 | Page 26

CYBER INSURANCE The ABCs Of Cyber Insurance A s technology in business evolves, the value of a strong cyber liability policy will only continue to grow. Everyone has heard about hackers invading large companies like Target, The Home Depot, and Anthem, but did you know that small businesses are just as susceptible to hackers as large ones? As Dmitri Alperovitch, founder of the cybersecurity firm Crowdstrike, famously said, “There are only two types of organizations: those that know that they’ve been hacked and those that don’t yet know.” The bottom line is that you need to be protected from cybersecurity crimes — and the simple fact is that your general liability policy will not adequately protect you. Standard commercial policies are primarily written to insure against injury or physical loss and will do little, if anything, to shield you from damages and costs should your data be compromised. The valuable data you are responsible for may include customer names and addresses, social security numbers, credit card information, and sensitive medical data. As a business owner, it is incumbent upon you to protect this information as though your life depended on it. Obviously, it’s not just your business at stake — with potential reparation outlays of over $200 per compromised record — but also your customer relationships, business reputation, and personal livelihood too. Most cyber liability policies cover first- and third-party thefts, ensuring that outside parties handling your sensitive data, such as mail houses or software vendors, are covered as well as internal parties. For first- party coverage, you want a comprehensive policy that includes costs for notification and remediation, crisis management services, business interruption, and cyber costs. Though it may sound like something out of a sci-fi novel, cyber extortion of your computer systems is also a possibility, requiring coverage for potential hijackings and ransom demands. Cyber liability insurance is specifically designed to address these threats, and the level of coverage you need for your business depends on your individual operations and range of exposure. Because of cyber insurance’s complexity, it is important to work with a broker that can identify your areas of cyber risk so that a policy can be tailored to fit your unique situation. Your broker will first conduct an inventory to help you review the types of data you handle in your business; how it is handled and protected; and who has access to the information and under what circumstances. You will also need to develop a privacy policy for your business that shows clients that you respect their confidential information and don’t readily share or disclose it. Working with a qualified and experienced broker will help ensure that you have the proper layers of security, including controlled access and appropriate backup. You also need to have plans in place to handle scams, fraud, malware, and spyware. Another huge area requiring protection is employee laptops. There are ways to enhance security for these items as well. Sterling Insurance Group was one of the first area brokerages to master the intricacies of providing cyber security coverage to a diverse set of clients. We encourage you to contact us at (586) 323- 5700 to learn more about how Sterling can cover you for the inevitable data breach—however distant it may seem. + Joe Haney is the President and Founder of Sterling Insurance Group. Celebrating 21 years of business ownership and growth, Joe believes in continuous improvement as evidenced by his earned designations as a Certified Risk Advisor, Certified Benefit Wellness Advisor and Certified Authority on Workers Compensation. Joe works with a variety of clients in both Risk Management and Employee Benefits. Joe is involved in several industry-related groups and philanthropic organizations as well. Contact him at [email protected] or [phone]. BY: JOE HANEY STERLING INSURANCE 26