Target…Neiman Marcus….Home Depot….and now Chase, Cyber Breaches are now a mainstay of Corporate America and will be for a long time to come. Although the first few IT Security breaches had caused uproar in the media and panic within the general public, it seems that as of now, these breaches are commonplace and even expected to happen. Being such a relatively new security trend, popular opinion amongst most business decision-makers was that IT Security and Cyber Breach Insurance was more of a luxury than anything. On top of all the other worries a business has, a hacker from china breaking into their files was one of low priority. However, with so many recent high-profile breaches, one would be foolish to not make sure their business was properly protected AND insured from such attacks. Instead of asking ourselves about the likelihood of a cyber breach, we must focus on covering ourselves on all bases for when the inevitable attack occurs.
Furthermore, it’s important not to assume the inclusion of cyber breach insurance within your business’s overall cyber insurance policy. Many CEO’s and business owners assume that any damage incurred by an IT Security breach, will be covered by their current cyber insurance plan. Unfortunately, this is often not the case. Just ask the person whose home was devastated by an earthquake (not covered by basic home insurance), or the driver whose car was wrecked by an uninsured motorist (not covered by basic car insurance), insurance policies often include caveats that leave out protection for certain scenarios. In the case of business insurance, that caveat usually includes leaving out coverage for any IT security breach related damages. Even Target themselves had to pay out-of-pocket to recoup their losses as their insurance policy did not fully cover the extent of damages due to Cyber Security nature of the breach. Just to be safe, it’s always a great idea to double check your policy and see how your business is covered in the event of a cyber security breach.