Business Insurance in Michigan: Importance of Protecting Online Data
Today, because of the increasing power of the Internet, more and more companies, big and small, are moving their businesses online. By doing so, however, they become vulnerable to cyber-attacks. This is why it is important to have some form of business insurance in Michigan that would cover and protect online data. One such coverage is the cyber liability insurance, also known as private liability insurance or cyberbreach insurance.
Elizabeth Weise of USA Today writes: “Cyberbreach insurance, which covers losses and costs due to hacker attacks on a company’s computer system, is a relatively new type of policy. It was first introduced in the 1990s, mostly to cover computer failures at banks and Fortune 500 companies.” This type of insurance became even more important in the 2000s when hackers began attacking the sensitive information database of various companies.
The costs of cyber liability insurance can vary depending on the insurance company and the type of coverage. Generally a good place to start is knowing the kind of incidents you need your company to be protected from and the costs for such protection. The policies would differ depending on the industry, business, size, and other factors. It is important to understand what your policy would cover and how incidents are going to be handled.
It is important to know that a general liability policy will not cover any losses incurred online, which is all the more reason to get a cyber-liability insurance. Businesses should identify the possible risks based on what they store in their network. For example, your business may store valuable data, including personal financial information, in your network database, and should this database be breached, operations will be severely disrupted. Businesses should make sure their insurance will cover the risks that they have identified.
Policies are generally categorized into first-party coverage and third-party coverage. First-party coverage refers to the business’ own costs that may be protected by insurance coverage, and third-party coverage refers to costs that others may try to claim after an incident. First-party coverages would include computer data loss and restoration, business interruption, theft, fraud, and extortion. Third-party coverage may include crisis management, notification costs, media liability, litigation, and others.
There are great advantages to doing business online, but it’s not without its risks. Hackers are everywhere these days, and they are getting better every day. No one is safe from cyber attacks, not even large multimillion-dollar companies. Businesses should make sure that they have a business insurance in MI that covers incidents or security breach of their online data so that they are less likely to incur untold losses.
(Source: Breach insurance: Not just for the big guys, USA Today, December 9, 2014)