Cyber Liability: Understanding Your Risk and How to Mitigate it
The extensive use of technology to handle financial, medical and personal information has expanded opportunities for cyber crime, and hacking and information theft threaten nearly every industry. To protect yourself from potential loss, understanding cyber liability and how to mitigate your risk may be critical.
Just as someone who causes a car accident may be liable for damages, a business may be responsible for unauthorized access to sensitive information caused by its action or failure to act. Stored social security numbers, credit card numbers, and medical records are just a few common examples of liability.
Third Party Liability
In the event of a data breach, you may be liable for the information exposed. Possible expenses include the following:
- Legal defense
- Regulatory fines
- Settlements and civil awards
Companies are responsible for protecting stored data, and even one successful hacker can cause chaos for you and those who trust you with personal information.
First Party Expense
In addition to external issues caused by a digital security breakdown, business-related costs may be incurred, too. Hiring forensics teams, notifying victims, recouping lost data, and utilizing public relations experts to recover your reputation are just a few expenses that may result from compromised company information.
How to Protect Yourself
Because cyber liability is so high and the occurrence of cyber crime so common, liability insurance is offered to help transfer your risk. Whether large, small, new, or established, your company may be a potential target, and investing in a cyber liability insurance plan can provide a safeguard against tremendous loss.