Cyber-related privacy and security risks continue to evolve like the hydra from Greek mythology. Once one threat has been addressed, two new threats seem to appear. Even the most well-prepared among us must remain vigilant in the war to maintain data security. And any business – no matter how large or small – needs a protocol for action when a cyber incident occurs.
Insurance coverage for cyber risks is a critical component of cyber risk management. Why? Simply put, the aftermath of a cyber incident may threaten the continued viability of your business because it can require substantial financial resources and time away from your core mission.
When a cyber incident occurs, a business must act quickly on several fronts, namely (1) taking the actions needed to keep the business running (“first-party” costs) – such as restoring access to your data through computer forensics or arranging for payment of a ransom – and (2) taking the actions required by law (“third-party” costs) – such as notifying your customers, suppliers, partners, or employees of a privacy breach and responding to any legal actions for damages. A cyber incident may require one or all of the following:
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