During the recent Equifax data breach, hackers accessed the financial information of almost 150 million people. The breach-related costs are currently at $439 million, projected to climb to as much as $600 million. As far as cyber hacking goes, this one may go down in the books as the largest and most costly in the history of attacks. Equifax has said only $125 million are covered by insurance.
So what does this mean for you?
Could a data breach happen to your Company?
If you’re in the business of holding personally identifiable information such as names, Social Security numbers, birth dates, addresses, driver’s license numbers, and credit card numbers, you’re at risk. In fact, as a smaller business, you’re at even greater risk from cyber attacks. According to data sources, 55% of small businesses have suffered from a data breach. In fact, 53% of all small business have dealt with multiple violations.
According to Kaspersky Lab, the average cost of a data breach grew from $1.2 million in 2016 to $1.3 million in 2017 and cybercrime damage is expected to hit $6 trillion annually by 2021.
The annual study, conducted by Ponemon Institute and sponsored by IBM Security, reveals that the average cost of a data breach is currently $3.62 million globally.
Can your company handle the costs of a clean-up if a data breach does occur?
Not only does it cost a lot of money to fix the issue, but there are also intangible costs. Cybercrime can hurt your reputation and put your employees at risk. Equifax says they are currently paying for security upgrades, legal fees, and free identity theft services to consumers whose data was stolen.
And did you catch that their insurance only covers a portion of their costs? According to Equifax, only $125 million of their $439 million will be paid by insurance. Why? The breach was so large that they did not have adequate coverage in place to cover all their associated costs. Consequently, they must now shoulder the brunt of the costs themselves.
What Does Cyber Liability Insurance Cover?
- Legal fees incurred
- Mailing or notifying clients of the issue
- Restoring the personal identities of those affected
- Credit monitoring for your customers after the incident
- Restoring and recreating data
- Public relations costs
What Lessons Can You Learn from The Equifax Data Breach?
First and foremost, no company, large or small, is immune to a cyber attack.
Second, the costs associated with a data breach include more than system upgrades and data recovery.
Third, without adequate insurance coverage, your company would have to pay the extra damages from your own coffers.
Where to Get Cyber Insurance in California
Post Insurance is the largest insurance broker in the area surrounding Torrance, CA. We represent over 50 leading insurance companies, which means we can build exactly the right policy to suits your needs.
To receive a quote, call 800.262.9998.