Cyberinsurance and Cybersecurity: Two Ways to Lower your Risks
Most companies think nothing of installing security cameras and purchasing theft insurance because they simply consider such things as a cost of doing business.
“Traditional liability insurance policies do not offer coverage for technology-related exposures. The truth is, the new liability is now in our data,” said Brandon Clarke, co-founder of Affenix, a cyberinsurance company in Knoxville, Tenn. “Seventy-one percent of security breaches target small business, however only the attacks on Fortune 500 companies are making the news. Compliance and regulatory decisions are also pushing small business to transfer their risk.”
Clarke said Affenix’s insurance program helps business transfer risk through its exclusive cyber liability insurance.
“We are the experts,” he said.
Sword & Shield has partnered with Affenix to offer a solution to our customers that provides assurance that they are minimizing their cybersecurity risks while offering liability protection in the event of a data loss. The result is peace of mind for the customer who finally gets an affordable insurance package coupled with the knowledge of the state of their cyberinsurance.
Clarke said companies need a specialized expert to help with cyber-insurance coverage, because there is no standard insurance policy for cyber liability and data breach insurance.
“Every policy and every insurance company has different coverages,” he said. “It is not like general liability, property, auto, workers compensation, or even Errors and Omissions (E&O) insurance. Many times, the client thinks they have coverage and don’t, and many times the coverage amounts are too low. Also many times the claims service is not specialized in advising the next steps or they don’t have the right tools to help the client in time of loss.”
In 2013, more than 3,000 companies suffered a data breach at a cost of up to $100 billion annually, according to the Center for Strategic and International Studies. And, while the best move remains hiring a knowledgeable cybersecurity firm, like Sword & Shield, companies are also looking to purchase cybersecurity insurance policies because the cost of an attack can be devastating.
Your company should consider cyberinsurance if:
• You have access to HIPAA information
• You have a merchant services agreement with a credit card company
• Your employees have access to personal identifiable information (PII) such as names, social security numbers, addresses, phone numbers and email addresses.
“Together we have created the first insurance program of its kind to provide front-end risk management and insure businesses from data breach,” Clarke said. “Most insurance companies rate premium off of revenue, which does not define true exposure. We believe front end risk management mitigates the risk of a breach and should generate lower premiums and more comprehensive coverage.”