Cybersecurity insurance is a topic that occurs more often in corporate and small business management discussions. It occurs because of the growing reliance upon Information Technology and the use of online software, systems and data storage for critical tasks and projects. Through the growth of cloud-based systems, business owners and managers use mobile devices for constant access to data and banking services. With increased deployment of online access to key personnel and necessary employees comes greater vulnerabilities that can be exploited to compromise data and asset security. Many applications on mobile platforms are vulnerable to exploitation. The increased usage of mobile devices as critical business tools has expanded the risks for data and financial security.
Cyber Security and Exploits
Many electronic business activities are vulnerable to interference and invasion by wrongdoers. Bank accounts are targets for theft, and hackers target personal data for exploitation including credit information and accounts. Recent court decisions and other circumstances demonstrated the risk of loss in banking situations. The customer has responsibility to cooperate with banks to promote maximum effective security. The customer also bears the responsibility for protecting information within its control that can lead to cash losses. In situations in which customers experience security breaches and consequent bank account invasions and losses, courts have held customers to account and not the banks. The Uniform Commercial Code and other standards support the basic division of responsibility for customers, banks, and financial institutions.
Litigation and Disputes
In recent years, many businesses have gone to court, arbitration, and other forums for dispute resolution to determine responsibility for financial and data losses and to recover lost assets. They incur costs, fees, and expenses of litigation and dispute resolution with no guarantee of a favorable outcome. Cases can drag on, and go to layers of appeals. As a matter of business planning, data, banking, and financial services are fundamental business processes. Every business seeks certainty and predictability, and most of all protection from loss and liability.
Cyber Insurance Offers Low-Cost Protection
Insurance is an excellent source of protection for business assets. This coverage includes liability to third parties as well as corporate accounts and assets. It is a predictable remedy for losses that result from failures in security which one may, in any part, tie to consumer responsibilities. It is important to customize insurance protection to the circumstances of the business. Protection for bank accounts and dealings with financial institutions is clearly part of the needs for most businesses. However, there may be unique exposures, and companies should explore these with an experienced insurance professional. As the roles of the Internet and Information Technology expand in everyday business matters, so must the insurance needs recognize this change. In the Information Age, businesses need to pay greater attention to cyber liability.