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Insure yourself against the havoc hackers can wreak

by on
in Leaders & Managers,Management Training

Consider the man who had an Internet business worth more than $1 million until one of his former employees decided to hack into the Web site, destroy customer records and post allegations that the business was a front for a pedophile ring. The owner’s wife ran a day care center. Both businesses are gone now, and the owner is still embroiled in a battle with his insurance carrier to collect.

The answer to such threats may be cyber-insurance. It comes in many forms and sizes. If your company sells goods or services over the Internet, you may be a good candidate for coverage. Cyber– insurance covers five areas of exposure:

1. First-party liability. Covers the company for loss of access to critical data or the exposure of confidential data or intellectual property.

2. Business interruption. Reimburses the company for loss of income and additional expenses incurred as the result of a cyber-attack.

3. Extortion. Some policies include ransom money you might have to pay to recover valuable information.

4. Crisis management. Pays for additional expenses incurred to recover from or mitigate losses, including public relations efforts to reassure customers and investors.

5. Criminal reward. Provides incentive for the apprehension and/or conviction of the cyber-terrorists.

Insurers may want to evaluate existing security measures, and could require upgrades before issuing a policy.

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