We’ve done our best to inform you of the dangers of not having cyber liability insurance. You’ve seen the numbers and read the reports we’ve passed along. And, just today, we received the newest results of a 2017 study that tracks the latest costs of cybercrime, which is now up to $7.35 million a year. Yet, the real cost of losing data is not in dollars, it is in the damage a company suffers to their reputation.
Of course, being able to lay the issue at the feet of cybercriminals shifts the blame, but what happens when the data loss occurs because of human error or negligence? The PR costs and the cost of rebuilding your brand can often outstrip the monetary cost of losing data and recovering it.
According to the Ponemon Institute, 24% of data loss in 2017 was caused by negligent employees and another 24% were caused by system glitches. On average, the monetary cost of these data losses ran about $209 per capita. All total, the cost of losing data to negligence or human error ran about $3 million over a 12-month span.
The industries hit hardest were healthcare, financial services, and professional services.
What are the indirect costs of a data breach?
From 2016 to 2017, the indirect costs of a data breach increased from $3.32 million to $4.03 million. Indirect costs would include lost business measured by:
- Abnormal turnover of customers
- Customer acquisition activities
- Reputation losses
- Diminished goodwill
You also have to take into account time spent on notification efforts and investigations of the incident.
How can you protect yourself when an employee’s error results in data loss?
If your company handles any type of sensitive client information (names, email addresses, credit card numbers, medical data, etc.) you need to have cyber liability insurance. Without this type of insurance, the cost of losing data can cripple a company.
- 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
In the case of negligence, or human error, you need funds for public relations in order to keep indirect costs to a minimum.
Where can you get cyber liability 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.