Posted on May 17, 2014
From unemployment and disability insurance to protection against liability, natural perils, and more, it's easy to get lost in the range of business insurance options. Due to the seriousness of network security for a company, many companies are opting for insurance related to cyber hacking - one in three companies now have such protection, according to Deirdre Fernandes.
Is business insurance against hackers necessary for your company? We take a closer look at the risks and potential costs for your company.
What's the Worst That Could Happen?
A global retail chain once lost 47 million customers' financial information due to hackers' efforts, which cost the company $17 million.
In addition to unsecured wireless Internet networks, Ron Teixeira looks at malicious code that can destroy company programs, lost or stolen laptops and mobile devices, insider threats from disgruntled employees, and spear phishing (spam) that can all undermine a business. While they might not reach the proportions of the global retail chain, Teixeira cites a 2006 FBI Computer Crime Study that values the "average loss of $69,125 per incident" related to malicious software programs.
Other attacks such as DNS spoofing and denial-of-service (DoS) attacks, where the latter prevents user access to email/website, can take its toll on a business. The "what if" scenarios can cost a company a great deal of time, money, and even customer trust. As a result, these threats are considerable due to the toll in the short- and long-term life of the company.
Options for Protecting Against Hackers
Business insurance can offer the same peace of mind and financial protection that other forms can do for a fire or consumer lawsuit. Due to the range of computer-based threats, companies of all shapes and sizes can have a vested interest in this area of business insurance.
The available coverages can vary quite a bit. L. D. Simmons II mentions third-party areas such as notification costs, crisis management, and media and privacy liability, as well as first-party areas like theft and fraud, extortion, business interruption, and computer data loss and restoration. He mentions that typical cyber insurance premiums range from $10,000 to $35,000 for $1 million in coverage.
These options are ideal for smaller companies that might not be prepared to face such an event. Since a range of options exist, it's vital that business owners identify relevant areas to look at what is needed. Companies should also have policies and processes in place for some of the events that can occur, in order to recognize and react as quickly and appropriately as possible.
Interested in more information? Contact Insurance321 to get the best quotes on business insurance.
Photo credits: Johan Nilsson