The Equifax data breach did more than expose 145.5 million U.S. consumers to identity theft — it opened the eyes of a lot of companies that thought perhaps that their cybersecurity apparatuses were impenetrable.
The thought of losing customers — and loads of money — has sounded the alarms at many companies who assumed they were on safe ground before Equifax. As a result, cyberinsurance has exploded in popularity since the Atlanta-based company’s September 7 disclosure that it was the victim of a massive hack, according to stock market website MarketWatch.
Cyberinsurance is the No. 1 insurance growth area among U.S. firms, MarketWatch reports.
You may be asking, “What exactly is cyberinsurance?” As companies have gotten serious about protecting their assets online, the insurance industry has responded to the marketplace by offering a key set of protections. Policies — often called cyber liability insurance or cyber risk insurance — have cropped up in recent years as hacking dangers have increased.
One insurer, Philadelphia Insurance Companies, offers a bevy of safeguards addressing cyber-liability exposures that could affect companies.
Their coverage includes protections “for legal fees and computer forensic costs in the event of a security or privacy breach,” the firm says on its website. They also offer “comprehensive interruption expenses coverage, including income loss.”
Another insurer, Travelers, offers Travelers Cyber Advantage, calling it a “pre-breach” to “post-breach” protection for companies. Like many companies ,though, Travelers has created several programs that assess a company’s risk before they fall victim to a cyberattack. That’s because in the event that one has already happened, other than replace monetary losses, there’s not a whole lot insurers can do.
“There’s so much new coverage out there that hasn’t been tested,” Tim Francis, a vice president and enterprise lead for cyberinsurance at Travelers Cos., told MarketWatch. “One day there will be certain claims and we’ll figure out if the words we used to convey coverage actually say what we thought they meant, which is often up to a lot of lawyers.”
In other words, the best protection is prevention, something that money expert Clark Howard says often.
Clark says hackers are also out to hack into your phone, so you have to have a mobile defense in place.
“First, always make sure you install the latest software updates from your operating system. These often include security and protection updates to help protect your device,” he says.
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