Brief Guide on First-Party Cyber Liability Insurance￼
The skyrocketing pace of digitalization in the last few years has changed our way of living. Now more businesses are adopting the work-from-home culture and shifting everything digital. Although it has eased our way of work but also made us more prone to new types of issues such as cyber-attacks.
Most businesses often fail to insure their online data, leading to cyber risks. However, cyber security liability insurance can protect your business from cyber-attacks. Let’s look at this brief guide on First-Party Cyber Liability Insurance that will help you learn more about it.
What is First-party Cyber Liability Insurance?
First-party cyber liability insurance covers expenses your company may face during a cyberattack and data breach in your system. These incidents mainly happen because of the error or omissions of the employees.
For example, if an employee writes sensitive information like passwords and credit card numbers or leaves their screen open. It allows the hacker a chance to breach the system. So getting first-party cyber liability insurance from professional insurance brokers can lower the impact of such attacks.
It will help cover the cost incurred on:
- Communicating with the affected customers
- Recovering data
- Organizing PR campaigns to maintain business reputation
- Paying ransom to hackers
- Hiring legal team
- Paying credit monitoring services
- Other expenses
Why do you need First Party Cyber Liability Insurance?
Cyber hackers are becoming more advanced and sophisticated in malware, hacking and conducting social engineering. If your business depends on digital technology to store information, communicate with clients or conduct sales, you are also vulnerable to cyber risks. Most companies often misconceive cyber attacks thinking it only happens to large businesses. But for hackers, every sensitive data is valuable. Look at the recent data, and you will know why you should protect your business:
- Around 62% of small businesses operating in Australia have faced some cyber security incidents.
- Australian businesses lose around $1 Billion annually in cybercrime.
- According to Unisys Security Index – Australia, 2019 report, 15% of Australians would stop dealing with a business after facing a breach.
If you don’t want to bear such expenses, get first-party cyber liability insurance from professional insurance brokers.
Features of First-party Cyber Liability Insurance
In the event of cyberattacks, businesses take various actions and incur expenses. Getting first-party cyber liability insurance will help you take all necessary steps and get coverage for some or all costs. Here are some of the features you can get in a first-party cyber insurance:
1. Cyber Incident Response
You can get insurance against fees and expenses incurred to investigate a data breach or pay response providers/cyber risk advisors or attorneys to inspect and verify whether the incident is considered a breach or privacy event under federal law or not.
2. IT Forensic
First-party cyber insurance offers coverage against costs incurred for hiring cyber forensic experts who determine what information got breached and how the hacker assessed the sensitive data. Also, forensic experts handle ransomware events as they remove the malware and decrypt and restore hacked files.
3. Notification coverage
In case of a breach, the insurance will help you cover the cost of notifying clients, businesses, and regulators by appointing a council to prepare and distribute notification letters. For many companies, it is legally mandatory to notify affected clients within a specific period.
4. Call Centre
Once the affected individuals receive the notification letter, they may get curious and want to know more about the incident. Here, operating a call centre will help in providing necessary information. The cyber security liability insurance will cover the cost of running a call centre.
5. Credit Monitoring
The insurance also covers the cost incurred in providing credit monitoring services to clients affected by the breach.
6. Crisis Management
First-party cyber liability insurance involves cover for the cost of hiring a Public Relations firm to protect the business reputation.
7. Crime and Social Engineering
The insurance policy will also include the cost to cover the loss incurred when someone hacks and uses sensitive information like username and password to withdraw the funds from the system.
Simple incidents like losing your phone, clicking on a malicious link on the email or downloading a wrong file can put you and your business at cyber risk, with heavy cost expenses coming along the way. Buying cyber security liability insurance is a smart way to deal with such situations and be prepared to cover the losses and manage your business reputation.
Connect with experts to learn more about what is included and how a first-party cyber insurance policy can safeguard you.