The 6 Most Important Building Blocks Of A Cyber Policy

Ransomware attacks occur every 14 seconds and 50% of these attacks target small businesses. By 2021 it is estimated that the total cost of all cyber crimes will exceed $6 trillion. If you think “I’m a small business that won’t happen to me” …think again. Nearly 50% of these cyber-attacks target small businesses and can have devastating effects not only on your business but your reputation with your employees, customers, suppliers and the public at large.

If you are targeted by a cyber-attack, your operations can be negatively impacted by 3^rd party liability claims brought by employees, customers and suppliers, ransom payments, legal fees, business interruption, digital asset restoration and computer replacement.

As the cyber threat to business continues to grow, insurance companies have developed insurance policies that provide the financial resources to respond to and help you survive a criminal cyber-attack on your business. Policy options span from add-ons to a commercial package policy to broader stand-alone policies. Not all policies are the same and you should consult with your HMK Insurance professional to assist you in developing the plan that best protects your operations. There are a few key coverages that should be made part of this valuable insurance protection.

The 6 Most Important Building Blocks of a Cyber Policy:

1. Network & Information Security Liability: provides protection from 3^rd party claims as a result of a security failure and data breach. These claims can include a monetary judgement you are obligated to pay as a result of your failure to adequately secure your computer networks and 3^rd party information stored on your computer systems.


2. Cyber Extortion: provides funds to pay ransom demands as a result of threats to alter, damage or destroy your computer programs, software or data stored on your computer systems.


3. Breach Response: reacting quickly and effectively to a data breach is critical. There is a significant cost to your response and this coverage will fund expenses such as attorney fees, forensic analysis and notification to affected individuals.


4. Business Interruption: a cyber-attack has the potential to shut your operations down and your insurance policy needs to provide the financial resources you will need to remain financially sound during the breach and your recovery. This coverage will pay for you continuing operating expenses, including payroll.


5. Digital Asset Restoration: a cyber-attack can lead to the loss of critical data needed to run your operations. Restoring this data after an attack is costly. This protection will pay for the restoration costs you incur due to alteration, destruction, damage and theft of your data.


6. Computer Replacement: After a cyber incident you may be faced with computer hardware that cannot be repaired or restored. This expense can be significant, and your insurance policy should be set up to pay for the expense.

It’s important to understand that all insurance policies contain exclusions and limitations on coverage, so it is essential to work with your HMK Insurance professional to assess your risk and design a Cyber Insurance Policy that provides the protection you want within your budget. Additionally, HMK has resources to provide you with a Cyber Risk Assessment free of charge just ask and your HMK agent will start the process for you.

John Eltringham

Commercial Insurance Advisor