Common first-party costs when a security failure or

data breach occurs include:

  • Forensic investigation of the breach.

  • Cyber Coach - Legal advice to determine your notification and regulatory obligations.

  • Notification costs of communicating the breach with your clients.

  • Credit monitoring to customers as a result of a breach.

  • Public relations expenses, if any.

  • Loss of profits and extra expense during the time that your network is down (business interruption).

Common third-party costs include:

  • Legal defense.

  • Settlements, damages and judgments related to the breach.

  • Liability to banks for re-issuing credit cards.

  • Cost of responding to regulatory inquiries.

  • Regulatory fines and penalties (including Payment Card Industry fines).

 

What Does Cyber Liability Cover?

Cyber liability provides financial coverage for expenses related to a data breach. These expenses can accumulate rapidly once a data breach is discovered. 

  • Customer Loss: Your customers that are affected by a data breach are likely to stop doing business with you since you failed to protect their sensitive data.

  • Business Disruption:  According to SecureWorks, a company specializing in data protection,  the disruption of doing business typically accounts for about 39 percent of the total costs of a data breach.

  • Regulatory Fines: Not only will your customers punish you after a data breach, various government agencies will also join the party. The FCC, FTC, HHS, and state authorities, all impose fines and /or expensive tasks you must perform once a data breach has been reported.

  • Legal Costs: Lawsuits filed by customers due to the data breach. Business owners need to understand that friendly customers can quickly become unfriendly when their bank accounts and credit cards are under attack. 

  • Public Relations: Once your business’ reputation has been tarnished, it is expensive to hire a PR firm to rehabilitate your company’s image.

  • Direct Financial Loss: Once a data breach has taken place, the attackers may obtain access to your financial accounts and will immediately wire available funds to accounts they control.

PROTECT YOUR BUSINESS

Common Cyber Breach Expenses

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