CYBER LIABILITY INSURANCE
7 REASONS YOU NEED TO
BUY CYBER LIABILITY
INSURANCE
BY: PATRICK HICKEY, ACCOUNT MANAGER, WAYPOINT INSURANCE
1) You don’t have to lose a hard drive to
compromise your customers’ personal
information. Threats (via ransomware,
phishing, hacking, etc.) will come to you
in your everyday use of the internet to
operate your business.
2) The expense of remediating a data
breach can be massive and, in many
cases, debilitating to a business. The cost
to restore your own data and systems
is only the beginning. Notification to
clients and professional fees are almost
certain. Cyber liability insurance is
about transferring that financial risk to
insurers willing to accept it.
3) Commercial General Liability and
Errors & Omissions policies, though
important, in most cases do little to
nothing to protect you against loss of
data and the costs associated with a
breach of your clients’ privacy.
4) Some cyber insurance policies can
compensate you for loss of income while
your website, data hosting services,
or hardware are incapacitated. Most
provide access to personnel qualified
in breach event management to guide
you through the process of dealing with
the threat, cleaning up the damage, and
safeguarding against future loss.
5) PIPEDA (Personal Information
Protection and Electronic Documents
Act) legislation introduced in November
2018 in all of Canada (and BC’s Personal
Information Protection Act [PIPA]
before it) now requires businesses
26
to report data breaches to privacy
authorities and to impacted individuals.
Business liabilities such as injuring
someone, damaging something, or
causing financial loss with bad advice
(where applicable) now sit alongside
your responsibility for the identifiable
information of others that they have
entrusted you with or that your hold.
Failure to comply with PIPEDA or
PIPA legislation can put you at risk of
substantial monetary penalties.
6) You don’t have to be Target, Home
Depot, or Yahoo to be targeted by
hackers, competitors, or similar
parties. Cyber breaches can happen to
any business, but it is your response
to a breach on which your reputation
balances. Reputational damage (on top
of the penalties mentioned above, as
well as the threat of litigation) comes
to those who lack transparency and
action. Customers expect to know what
happened and what you’re doing to
protect their privacy.
7) The concept of “cyber insurance” is
actually a diverse group of insurance
products available from many carriers.
There are both stand-alone policies and
policy extensions with varying degrees
of coverages and limits of insurance.
An insurance broker can help you find
coverage to complement your other
insurance protection that will give you
peace of mind within your budget.