Cyber Insurance Basics for the New York Business in E-Commerce, Social Media, Etc. (and Everyone Else)
Insurance is a natural bedfellow for any business, but only recently has specialized coverage been designed for online operations. And as the number of businesses that butter their bread by leveraging online and computer heavy operations increases, so does the sting of monetary losses due to these platforms failing. Since Facebook’s privacy foibles have become the toast of the tech tabloids, it should be clear to anyone that data loss, hacking, and other problems can cause disaster. And as early as 2005, 9 out of 10 companies faced a computer security incident, according to the FBI Computer Crime Survey (www.fbi.gov).
Enter the relatively new cyber insurance product which has swelled in popularity and usage. This type of business insurance is specifically tailored to cover the costs of untangling the mess and loss of business when computer systems are paralyzed.
Who Should Get Cyber Insurance? Companies with valuable data, an online operation or a significant intra office network of computers can benefit from this form of coverage. Also, having such insurance is a good piggyback on top of the IT measures that your company may already be undertaking (e.g., firewalls, virus protection, anti-spam systems, etc.).
Classic instances of coverage are hacker and cracker attacks that compromise or destroy valuable data. Another classic scenario is interruption of online services (think of all the “software as a service” providers who cringe at the thought). Also, the loss of business capacity during the cleanup phase is also cause for coverage.
ELEMENTS OF CYBER INSURANCE COVERAGE
- Content, Media, Web Liability: protection against charges of libel, slander, copyright and trademark infringement for content and materials such as photos and third party content and ads that appear on your online platform (e-commerce or social media site).
- Privacy and Data Security Liability: Any customer or client data, regardless of whether you are a social media operation like Facebook carries privacy law implications. Private data of clients, customers, users and/or employees such as credit card numbers and home addresses are candidates for inadvertent disclosures. The compromise of this data can carry severe legal and other consequences.
- Business interruption, denial-of-service attack and lost income: Coverage for the interruption in an online business if there is some kind of ISP or host failure, or an attack from hostile third parties. This coverage helps with loss of business and costs associated with damage control and data recovery.
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