Between January of 2005 and June of 2020, 102 data breaches were identified in South Carolina. These breaches resulted in the misappropriation of 7,656,310 records at a total cost of about $1.2 billion to the companies that were hacked. That is why cyber liability insurance is so important in this state.
If your company stores or maintains sensitive third-party information electronically, it is at risk. Talk to a local independent insurance agent to learn how a solid cyber liability insurance policy can help your South Carolina company manage the financial repercussions if this data is accessed by criminals.
What Is Cyber Liability Insurance and Why Is It Needed?
Cyber liability insurance is a relatively new insurance product that was designed to protect businesses from financial losses related to cyberattacks.
Most businesses in South Carolina can benefit from the security offered by cyber liability insurance. Reported incidents of computer hacking and cybercrimes are on the rise in this state, and this puts businesses that use computers to store sensitive data at risk.
The costs associated with cyberattacks are also increasing. According to the 2019 Hiscox Cyber Readiness Report, the average financial loss sustained by US companies impacted by cybercrimes is currently $119,000 per incident.
Most small businesses cannot recover from a loss of that magnitude. That is why having cyber liability insurance can prove crucial.
How Much Does Cyber Liability Insurance Cost in South Carolina?
Prices for cyber liability insurance can vary from one company to the next. Some of the factors that can influence how much your policy will cost include the following.
- The type of company you own and the industry in which it operates
- Your company’s size and annual revenues
- The amount of third-party data you maintain and its level of sensitivity
- The data security measures your company has taken
- The amount of coverage you want to purchase
- The amount of your deductible
- The insurance company you are purchasing your policy from
On average, US companies pay about $1,500 a year for every $1 million in cyber liability coverage. Smaller businesses with low risks pay significantly less than this average.
A local independent insurance agent can help you compare a variety of policies and quotes so you can be certain you are getting your coverage at a competitive price.
Who in South Carolina Needs Cyber Liability Insurance?
When you think of the types of business that might need cyber liability insurance, you probably think of large and high-asset companies like law firms, banks, doctors’ offices, hospitals, and technology firms, since these types of businesses typically maintain a lot of sensitive client data.
However, nearly every kind of businesses, both large and small, can benefit from the protection offered by cyber liability insurance. Basically, if your company keeps sensitive third-party data in a computer system, cyber liability insurance may prove crucial someday.
Cyber liability insurance for small businesses
While you may think that cybercriminals only attack large, wealthy companies, this is not the case. According to the Solvere One, an IT security firm based in Virginia, cyberattacks on small businesses in the US are on the rise and are expected to cause losses of more than $5 trillion over the next five years.
No matter how small a business you may operate, if you have sensitive data like credit card information, social security numbers, or personal information in your care, you can benefit from protecting your company with a cyber liability insurance policy.
Business Liability Insurance
Examples of Cyber Liability Insurance Claims in South Carolina
One of the worst cyberattacks in South Carolina history occurred in 2012 when hackers accessed the South Carolina Department of Revenue databases and accessed taxpayer information. This breach exposed about 3.6 million social security numbers and nearly 400,000 credit card numbers.
Even though much has been done to improve cyber security in this state since that breach, a recent study conducted by WalletHub lists South Carolina as the second most vulnerable state in the country when it comes to cybercrime.
There are a few different ways that data breaches can occur. A good cyber liability insurance policy can cover against each of them. The most common forms of cybercrime include the following.
- Hacking: This is when cybercriminals find ways to work around your company’s firewalls and security measures to break into your system and access information.
- Phishing: This is a type of social engineering in which cybercriminals trick employees of your company into providing information that enables them to access passwords and secured computer files.
- Malware attacks: This is a malicious code that gets installed into your company computers, usually through links or downloads send to people working at the company. It can be simple like a keystroke logger or severe, such as a program that completely hijacks important files and releases them only once a ransom has been paid.
Any South Carolina company that uses computers is at risk for any one of these sorts of data breaches. You will therefore want to 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?
There may be some variations in what different policies will cover, but for the most part, you can expect your cyber liability policy to cover costs associated with the following.
Legal fees including
- Court costs
- Lawyers’ fees
- Fines and penalties
Customer information and restitution including
- The cost to notify all affected individuals of the breach
- Supplying affected individuals with credit monitoring and identity restoration services
Company reputation recovery, including
- Fees for representation by a public relations firm
- Cost of restoring lost data
- Errors and omissions coverage if your company is unable to fulfill contractual obligations as a result of the data breach
Other costs and obligations including
- Running IT forensics to identify the source of the attack
- Paying ransomware demands to free necessary data
- Network business interruption insurance to cover losses sustained while your business was unable to operate at capacity due to the data breach
Cyber liability insurance can provide a wide range of coverage. When you work with a local independent agent, you can get answers to all of your questions about cyber liability insurance.
What Does Cyber Liability Insurance Not Cover?
Cyber liability insurance does have some limitations. For instance, most policies will not cover the following.
- Potential future profit loss: Although the data breach may result in lower-than-expected future profits, these losses will not be covered by your policy.
- Lowered intellectual property value: If your company’s intellectual property is lost or accessed because of a data breach, this can significantly lower its assessed value. This loss is not covered by your policy.
- Betterment costs: These are the cost associated with improving or upgrading your technology systems and cyber security software. They are not covered by your insurance.
A local independent insurance agent can explain more about your cyber liability insurance policy’s coverage exemptions.
How to Find the Best Cyber Liability Insurance Coverage in South Carolina
If you are looking for an affordable cyber liability insurance policy to cover your South Carolina business, a local independent insurance agent can help. These agents work for you, not for a specific insurance company, so they are free to shop around to find you a reliable policy at a great price.
Don’t leave your businesses exposed to large financial losses caused by cybercrimes. With more than 300 independent agents located in South Carolina, it should be easy to arrange an obligation-free consultation with an insurance agent near you.