If you are looking to buy cyber insurance, you are going to encounter discussions of first- and third-party coverage for a cybercrime. As mentioned in our last blog, first-party coverage is all about purchasing coverage to handle the direct and indirect losses that create economic loss for your business as a result of the criminal cyber event.
Following the loss or damage to your data faster from a cyber event, first-party losses may include the expenses that cascade down from that first event. Here are six significant expenses that you may want to have covered.
- Forensic expenses – You will find it necessary to use resources to find out what happened. The ‘when, where, why, how,’ the breach or event occurred and most importantly, who is affected. You can’t begin to fix anything until you find out what is broken.
- Recovery costs – These are all the extra resources you may expend working to recover lost or damaged data. Depending on the complexity and the resources of your in-house staff, recovery and forensic efforts may require outside consulting support.
- Loss of income – This would be akin to the business interruption insurance you may have under your commercial property insurance policy. It refers to the income lost as a consequence of the data event
- Extortion – Did you have to pay a ransom to get your data back? Ransomware is a popular form of cyber-attack and while governmental authorities strongly recommend against giving in to ransom demands, many entities end up finding that is the only path to data recovery.
- Notification – Keep in mind that under various piecemeal state and federal regulations, you may have specific notification requirements to alert anyone whose data was compromised. This may require media ads, mailings, etc.
- Public relations – Because data breaches often require public notification, a cyber-attack can be a branding nightmare. For small businesses, it can be fatal. You will certainly need to expend considerable resources to recover the confidence of your clients or customers.