According to news reports, California is one of the most targeted states for cyber-attacks. Meanwhile, a recent ransomware incident in a Los Angeles health center led to exposing the personal information of about 400,000 patients. And the payouts of the attacks amount to several billion dollars which makes a business vulnerable as it loses its productivity and customers. Hence, cyber liability insurance in Los Angeles, CA, is a must for all businesses to safeguard them from financial loss caused due to cyberattacks, cybercrimes, and data breaches.
When your company is insured, the insurance pays for the lawsuits and other associated expenses to defend and cover all the financial losses. So, if you are a Los Angeles-based business, you must be insured, and before that, know some important facts about this below.
Who Can Use Cyber Liability Insurance?
Cyber liability insurance is for businesses of all sizes that use the internet to store confidential customer data like credit card numbers, contact numbers, and customers’ personal information. Meanwhile, small businesses are severely affected by ransomware attacks, and Los Angeles has more than 244,000 small businesses that power its economy. These organizations work with limited budgets and may struggle to have the resources to suffer the consequences of a data breach. Meanwhile, a data breach may cost up to 3.86 million dollars. And when the costs are taken care of, the businesses can return to their usual operations.
What Will Your Cyber Liability Insurance Cover?
Cyber liability insurance in Los Angeles, CA, have coverage options according to specific business needs. It includes:
- Lawyer costs
- Business interruption costs
- Costs of PR and marketing
- Extortion money
- Negligence claims or breach of contract claims
- Fines from regulatory bodies
- Other ancillary costs
- Customer support and crisis management
What Will Your Cyber Liability Insurance Not Cover?
Your cyber liability insurance will not cover the following:
- Any kind of preventable security issues like mishandling digital assets or poor configuration management.
- Incidents occurred before the policy came into effect.
- Acts caused or initiated by the insured.
- Infrastructural failures.
- Costs incurred to upgrade organizational systems or security.
- Expenses beyond the policy’s coverage limits
How Important Is Cyber Liability Insurance?
With the increasing number of ransomware, data breaches, and cyber-attacks, cyber liability insurance needs to be one of the topmost priorities for businesses. Meanwhile, a cyber security threat may cause a social media account breach, leak of confidential client information, compromise data security, and identity theft or phishing scams. And these threats could have a devastating impact on small businesses that do not have the resources to deal with security issues. Also, in the absence of insurance, businesses’ capital could be siphoned, and the potential costs of fixing such threats will be overbearing for any business.
What Factors Determine the Cost of Cyber Insurance?
The factors influencing the cost of cyber insurance include:
Industry: Cyber insurance costs are usually higher for companies operating in the finance and healthcare industry, which experience higher rates of attacks.
Size: The large-sized organizations have vast databases and have higher risks of getting compromised. Meanwhile, the smaller companies are equally sensitive to ransomware attacks in Los Angeles. However, large-sized companies require higher premiums as it has wide coverage scope.
Coverage type: It combines the industry, business size, and the coverage amount a business is opting for.
Regulatory requirement: The regulations that the company needs to comply with also determine the cost of insurance premiums.
The factors mentioned above must have provided you with a better idea about the consequences of a security compromise and the significance of asset protection. So, get your business insured before it’s too late.