Does Your Accounting Firm Need Cyber Liability Insurance?

The cybercrime landscape is getting more unpredictable and complex every day. Cybercriminals are finding more effective ways to infiltrate business networks and steal critical business data.

The fact is that the cybercrime business has never been bigger – it’s estimated that the global cybercrime industry will cause up to $6 trillion in damages in just a few years. It remains such a lucrative business because targets – like your accounting firm – keep failing to learn how cybercriminals operate, and how to protect against it.

That’s why you need to take steps to protect your firm before anything bad happens – have you considered cyber liability insurance?

What Is Cyber Liability Insurance?

Often referred to as cyber liability or data breach liability insurance, cyber liability insurance is a type of stand-alone coverage.

Cyber liability insurance is designed to help businesses cover the recovery costs associated with any kind of cybersecurity incident including:

  • Breach and event response coverage
    A very general and high-level form of coverage, this covers a range of costs likely to be incurred in the fallout of a cybercrime event, such as forensic and investigative services; breach notification services (which could include legal fees, call center, mailing of materials, etc.); identity and fraud monitoring expenses; public relations and event management.
  • Liability coverage
    This type of coverage protects the policyholder and any insured individuals from the risks of liabilities that are a result of lawsuits or similar claims.

    Put simply, if you’re sued for claims that come within the coverage of the insurance policy, then this type of coverage will protect you.

    There is a range of types of cyber liability insurance liability coverage, which include:

    • Privacy liability: This applies to the costs of defense and liability when there has been a failure to stop unauthorized use/access of confidential information (which may also include the failure of others with whom you have entrusted data).

      Coverage can also extend to include personally identifiable information and confidential information of a third party.

    • Security liability: On a higher level, this type of coverage applied to the costs of defense and liability for the failure of system security to prevent or mitigate a computer-based cyber attack, which may include the propagation of a virus or a denial of service.

      An important note – failure of system security also includes failure of written policies and procedures (or failure to write them in the first place) that address secure technology use.

    • Multimedia liability: This type of coverage applies to the defense and liability for a range of illegal activities taking place in an online publication, such as libel, disparagement, misappropriation of name or likeness, plagiarism, copyright infringement, or negligence in content.

      This coverage extends to websites, e-mail, blogging, tweeting, and other similar media-based activities.

  • Cyber extortion
    This type of cybercrime event is generally a form of a ransomware attack, in which a cybercriminal keeps encrypted data inaccessible (or, alternatively, threatens to expose sensitive data) unless a ransom is paid.

    Coverage of this type addresses the costs of consultants and ransoms, including cryptocurrencies, for threats related to interrupting systems and releasing private information.

Cyber liability insurance policies are offered by a variety of insurers and policy prices and exclusions vary widely among different providers.

Do You Actually Need Cyber Liability Insurance?

Maybe you don’t technically need cyber liability insurance. That is to say, you may not be required by the law – although certain compliance regulations, depending on the industry, do recommend it.

But, odds are, it’s more likely you’ll need cyber liability insurance in one form or another at some point, which is why it’s wiser to invest now.

Like this article? Check out the following blogs to learn more:

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