Between January 2005 and June 2020, 244 data breaches were identified in Colorado. These breaches resulted in the misappropriation of 7,372,814 records at a total cost of about $1 billion to the companies that were hacked. This is why cyber liability insurance is so important in this state.
If your company stores important third-party information electronically, it is at risk. Talk to an independent insurance agent in Colorado to learn about how a solid cyber liability insurance policy can help your company manage the financial ramifications if your records are accessed by criminals.
What Is Cyber Liability Insurance?
Cases of data breaches and cybercrimes are increasing every year. This puts businesses that use computers that are connected to the internet at risk. Even if your company is safeguarded by firewalls and other security measures, cyber criminals are constantly developing new ways to access protected information.
Furthermore, the costs associated with cyberattacks are also on the rise. The 2019 Hiscox Cyber Readiness Report stated that the average cost per cybercrime incident in the US currently stands at approximately $119,000. Most small businesses cannot handle a financial loss of that size.
Cyber liability insurance is a relatively new insurance product that was designed to protect businesses from losses related to cyberattacks and data breaches.
How Much Does Cyber Liability Insurance Cost in Colorado?
On average, a cyber liability insurance policy that provides $1 million in coverage with a $10,000 deductible will cost your business about $1,500 a year. Of course, smaller businesses with low risks will pay much less than this.
Some of the many factors that can influence how much a cyber liability insurance policy will cost your company can include:
- The type of company you own and the industry it operates in
- Your company’s size
- Your company’s average annual revenues
- The amount of data your company stores and its level of sensitivity
- The security measures your company has put in place to protect against data theft
- The amount of coverage you are purchasing
- The size of your policy’s deductible
Every insurance company has its own way of assessing risk and calculating rates, so it pays to compare quotes from a few competing insurers before choosing a policy. Independent insurance agents in Colorado make comparison shopping easy.
Who in Colorado Needs Cyber Liability Insurance?
From law firms to banks to small accounting firms, any business that stores customer data electronically can benefit from a cyber liability insurance policy.
Small business owners may feel that their companies are too small to attract cyber criminals, but they too are vulnerable. In fact, data security firm Solvere One conducted a study that found that cyberattacks on small businesses are on the rise and are expected to cost these companies more than $5 trillion in losses over the next five years.
No matter what type of business you own or how large or small it is, if you electronically manage other people’s sensitive data, you should strongly consider protecting your company with a cyber liability insurance policy.
Examples of Cyber Liability Claims in Colorado
There are several different ways that computer crimes and data breaches can occur at your place of business. A good cyber liability insurance policy can protect your company against many of the related financial losses.
Some examples of ways that criminals can attack include:
- Hacking: This is when sophisticated cyber criminals find a way to break through your company’s firewalls and other security features and successfully access your data.
- Phishing: This refers to social engineering tactics used by criminals to trick people who work at your company into providing information that enables them to access passwords and secured computer files.
- Malware attacks: This is malicious code that criminals find a way to install in your company's computer system, often through phishing techniques. This code can allow them to view and access sensitive data or even completely hijack your system and system and files and then demand a ransom to be paid in order to have it restored.
One well-known crime that occurred in Colorado happened in September 2020. AspenPointe, a nonprofit mental health services provider based in Colorado Springs, was successfully attacked by cybercriminals. Nearly 300,000 current and former patients had their medical records exposed, and the company was forced to take its systems offline for several days, which resulted in significant disruptions to their operations.
Every business that uses computers is vulnerable to cyberattacks and data breaches. Be sure that you have a good cyber liability insurance policy in place to help your company deal with the aftermath if your customers are affected.
What Does Cyber Liability Insurance Cover?
While there may be some variations in what policies from different insurance companies will cover, you can expect most cyber liability policies to cover costs related to:
- Getting out notifications about the data breach to all affected individuals.
- Providing affected individuals with credit monitoring and/or identity restoration services.
- Imposed fines and/or penalties resulting from lawsuits related to the breach.
- Fees for legal defense representation.
- Paying for a public relations firm to help with restoring your company’s reputation and standing.
- Having an IT specialist run forensics to find the source of the attack and identify your company’s vulnerabilities.
- Replacing or restoring lost or damaged data.
- Negotiating with cybercriminals and paying their ransomware demands, if necessary.
- Providing network business interruption coverage if your computer system is rendered unusable for a substantial amount of time.
- Providing errors and omissions coverage if your company is unable to fulfill contractual obligations due to the data breach.
A local independent agent can help you find a comprehensive policy and can ensure that you fully understand the coverage it provides.
What Doesn't Cyber Liability Insurance Cover?
As with any kind of insurance policy, cyber liability insurance has its limitations. Most policies will not cover financial losses related to:
- Lower potential future profits
- Devaluation of your company’s intellectual property
- Improving or upgrading your technology systems and/or security software.
When you work with an independent agent, you will have access to an insurance professional who can explain the fine print regarding what your policy will and will not cover.
How to Find the Best Cyber Liability Insurance Coverage in Colorado
When you are looking for a cyber liability insurance policy for your Colorado company, you can turn to a local independent insurance agent for help. These agents don’t work for a particular insurance provider, so they are free to shop around to find you a reliable policy at a competitive price.
There are more than 250 independent agents with offices in Colorado. Set up an obligation-free consultation with an insurance agent near you to get more information about cyber liability insurance and other business insurance products.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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