hacker guessing passwordCyber threats can take many forms and are a concern for businesses of all sizes. Although large corporations tend to make headlines after a cyber breach, small and medium-sized businesses (SMBs) are just as likely targets. Big companies typically have more robust cyber security than SMBs. While successfully hacking into a large business’ network means a bigger payout for cybercriminals, it also requires more time and effort than it does to access a less-protected SMB. Regardless of the company’s size, cyber threats are a significant concern for all businesses.

What is Cyber Exposure?

Cyber exposures comprise all the risks and vulnerabilities tied to the company’s networks, systems, and data. Every business has a unique set of exposures, and identifying them can help IT personnel better insulate the company from cyberattacks. Failing to ascertain the biggest exposures can result in cybersecurity that doesn’t align with the existing vulnerabilities.

Business Cyber Liability Exposures and Responsibilities

Companies conduct numerous day-to-day activities that can lead to a data breach and leave them liable for the damage. Some exposure points include:

  • Storing personal identifying information (PII) on laptops, tablets, or smartphones.
  • Storing or collecting employees’, customers’, and other sensitive data. Virtual and physical storage are both at risk. For example, sending sensitive information in an email is risky, but even cloud storage has vulnerabilities. Paper records are even riskier when stored in unsecured filing cabinets. Anyone within the organization or who learns about the vulnerability can access them.
  • Collecting customer credit card information and processing payments on e-commerce platforms.
  • Allowing partners, employees, contractors, or other vendors to access networks, cloud servers, or data without adequate security safeguards.

Human error is the most common cause of data breaches. An employee may fall for a phishing or smishing scam without the proper training to recognize one. Cybercriminals constantly evolve their tactics, and these fraudulent emails and texts are increasingly convincing. Weak passwords or password sharing are also significant exposure points.

Businesses have a responsibility to protect their employees and customers from cyber exposure. They have to comply with numerous state and federal laws regarding cybersecurity. They can be found liable following a breach if they:

  • Fail to implement reasonable cybersecurity measures and data safeguards as required by law.
  • Fail to inform the people affected by a successful cyberattack in a timely manner.
  • Failed to rectify or mitigate the damage following a cyberattack.

Negligence is a key factor in proving liability. However, businesses can be liable if the affected individuals or parties have service agreements or indemnity clauses with the company.

Mitigating Risk with Cyber Liability Insurance

Cyber liability exposure is a part of doing business in an increasingly high-tech world. Employee cybersecurity training, security hardware and software, firewalls, data backups, access control, and regular password updates are essential to insulate a business against cyberattacks. However, even the most robust defenses can fall victim to intent cybercriminals.

Cyber liability insurance can cover the costs of ransomware attacks, responding to the breach, managing public relations, and business interruptions. It can also cover the expenses of lawsuits claiming various types of liability, such as failing to protect private data, technology errors and omissions, etc. Contact Windermere Insurance Group to discuss your cyber liability exposures and how to manage them.