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Cyber Liability Insurance: Where You Turn When a Data Breach Occurs


Cyber Liability Insurance Where You Turn When a Data Breach OccursThe Ponemon Institute, an independent research organization on privacy, data protection and information security policy, estimates that between 2014 and 2015 the cost of data breaches due to malicious or criminal attacks has increased from an average of $159 to $174 per record. With the continuing rise and frequency of attacks and this surge in response expenditures, the potential damage to brand reputation, class-action lawsuits and costly downtime is becoming increasingly evident. As a result, more executives and boards of directors are paying greater attention to their firms’ security practices and purchasing Cyber Liability/Privacy & Network Security insurance.

How does Cyber insurance respond when a breach occurs? It does so in a number of key ways, which not only minimizes your firm’s out-of-pocket costs but also helps mitigate the damage of the breach while providing greater positive outcomes for your organization, its reputation and customers.

When a breach happens, your company will need a variety of response services to kick in. This involves forensic investigation expertise to find out how the breach happened, who is affected, and what the risks are. A timely digital forensic analysis helps you contain the damage, determine the scope of the breach and develop a compliance response. Digital forensics requires technical expertise on nearly every major operating system, mail client/servers and types of mobile devices. It also requires expert data collection, analysis and production to minimize disruption to your business. You need professionals who can provide valid, third-party analysis for regulatory compliance and the possible litigation. Cyber Liability insurance will pay for the costs for a professional firm to conduct the forensic analysis. In some cases, depending on the type of Cyber policy you purchase, you will have access to specific providers for these services.

Additionally, when a cyber-attack is discovered, acting quickly is of paramount importance. The message, timing and delivery of breach communications have to be in accordance with state regulations or you could face fines, penalties and lawsuits in addition to an increase in lost business.  A well-designed Cyber policy will pay for the costs to manage consumer notification, regulatory reporting, public relations and other services so you remain compliant in the event of a breach. For example, you need to send out notification letters to affected individuals, hire a call center to follow up with customers, provide a website for individuals to enroll in identity protection services, and employ crisis communication services to deliver consistent messaging, and more.

Cyber insurance is there when you need it, responding to a host of exposures. At Axis Insurance Services, we specialize in securing a tailored Cyber/Privacy & Network Security policy for our clients. We’ll analyze your specific risks and discuss your options to put into place the right plan fit for your company and the industry in which you serve. Give us a call at (877) 787-5258.

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Blogged on: February 17, 2016 by Mike Smith
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