A recent alert directed to the debit card holders in India of certain banks like HDFC, Yes Bank, Axis Bank, SBI and ICICI to change their PIN spread like fire across the nation. Reportedly, there was a breach of card details of approximately 3.2 million debit cards due to the malware in the system that serves the ATMs. This was; by and large; considered to be the largest security breach in the nation. Still, cyber security is not taken seriously by most business organisations in the country even today.
Cybercrimes are on the rise and while you set up a new business or are already running a relatively successful one, have you ever reviewed whether your business is completely protected from such unforeseen risks?
You might bet on having the best cyber security in place thus, reducing the risk of data breach to a large extent but what if unfortunately, significant business information is leaked due to any kind of negligence, loss of laptop or an important email that reaches a wrong destination? Even if such things may not have been done deliberately or intentionally, these are still possible in everyday workload.
In such a case, there is a significant cost that you would need to incur towards the suppliers, customers, and other such third-parties along with the cost of retrieving the lost data too. All such liabilities can lead to a loss of a large chunk from your business income along with the time lost to bring everything in place.
This is where you need to transfer the risks so that the whole liability should not come upon you or your business directly. The best way to do it is to avail an insurance cover. There might be many business insurance covers that you might have availed till now, but they are not the full-proof security for your business.
For enhanced cyber security, you need to avail a cover that gives you specialised cover against cybercrimes and data breaches. This is where the cyber risk liability insurance cover comes into the picture. This specialised cover enables you to protect your business against risks of data loss in the following ways:
1. Covers First-Party Liability and Third-Party Liability:
Companies often require to take the details of their costumers for security purposes. However, if due to any chance such data is lost or hacked, then, there is a cost that may incurred by the business organization, like legal fees in case of lawsuits, cost of retrieving data and also, the cost of digital investigation. ?It might be because the third-party which is affected in such cases might demand reimbursements that may be huge enough to be covered by the business. So, a cyber risk liability insurance is an important cover that can come handy at such a time.
2. Breaches Leading to Temporary Business Breakdown:
It often happens that there is a loss of business revenue because of a virus impairing the functioning of the computer systems. To resolve it, you might require to pay for the credit monitoring services or forensics for the early detection of virus etc.?You might also incur losses for the period in which there is no functioning due to the virus. ?All such expenses can also be covered through the cyber risk liability insurance policy that you may avail.
3. Expenses Due to Malware:
This may include the disruption in the proper functioning of the computer systems not due to any actual data breaches but due to malware. Malware may include downloading of a corrupt programme that me corrupt all the important files of the system. It may include loss of relevant data posing as a cyber threat.?A cyber insurance cover covers such indirect expenses arising out of the malware too.
4. Extended Reporting Period:
Mostly, it takes time to detect breach of data. But, if a breach is detected after the policy expires, what do you do? Some cyber risk policies come with an extended reporting period in order to cover the tenure taken to detect data breaches. ?So, you can also avail such policies thus reducing the risk of losing the policy cover, when most required.
5. Specialised Insurance Agreements Available:
Though the main layout of a cyber risk policy is the same, you can avail certain specialised features and enter agreements to protect your business from the cyber risks. For e.g. E-commerce firms face more risk of extortion of consumer details while others may have more risk of frauds. You can also set an upper limit to various such agreements based on your business requirements.
So, above are the five most effective ways in which a cyber risk liability cover can ensure protection of your business data and reduce risks of data loss.