Episode 25:  Cyber security and cyber theft are real issues for small business owners.  There are now cyber liability insurance policies available to cover you, should you fall victim.  In this episode, I interview Beth Combs and David Goheen from Gallagher, a large insurance company providing multi-line insurance, risk management and consulting services.

Gallagher was founded in 1927.  Beth and David are heavily involved with various types of commercial coverages.  They can also assist with personal, home and automobile lines for various needs.

How Does Cyber Liability Insurance Work?

David explains that many businesses have access to personal information/data about employees, co-workers, customers, vendors, etc.  This creates exposure for cyber liability.  You could be held accountable if that sensitive information gets exposed.

A cyber liability policy can cover legal fees, forensic investigation, credit monitoring and more.  It’s an added layer of protection.  A small business can be financially devastated if it were to be held responsible for the exposure of personal and financial data.

If you have access to client credit card number or other information, it could get compromised.  You may be proven to have been responsible for the breech.  Again, this is when a cyber liability policy could help to save your business.

Social Engineering

This is a type of cybercrime.  It’s becoming more common.  A criminal can pose as another person and contact you to make a transaction.  It typically results in the loss of your own funds.  They may seem harmless, especially if they are using a familiar party’s identity.

It’ll Never Happen to Me

The sophistication of these online criminals is increasing and increasing.  Because of this, the liability insurance policies are becoming more popular.  Interestingly, if someone hacks you, they can often sit back and simply watch your transactions, contacts and communication.  You may not even realize they have that level of access.  Once they decide to act, it’s often too late.  You might begin considering cyber liability insurance.

Are Your Employees Accessing Your Systems Remotely?

As more employees have transitioned to work at home status, the risk for this type of exposure has increased.  A company can take steps to ensure its infrastructure is secure, but work at home employees may not have those safeguards in place.  Multi-factor verification can be an important layer of protection.

Ransomware

Cyber liability policies can also provide coverage in situations involving ransomware and extortion.  These situations often involve an employee who inadvertently opened a malicious email or clicked on a link contained therein.

The criminal basically hijacks the entire computer system and locks out the company.  A ransom is demanded for the return of the access.  If the company refuses, the company is told the information will be released often “on the dark web.”  This creates a serious security risk for future problems, in addition to the loss of business and funds during the lockout.

Companies should take steps to education their employees about this issue, what to look for and how to avoid risky behavior.  It’s a good idea to work with a reputable IT company.  This is not something you simply want to buy on price.

How Do I Apply for Cyber Liability Insurance?

Gallagher is an insurance broker.  They can compare coverages and premiums from multiple underwriters to help you.  The application is typically a 1-page form.  Some basic security upgrades to your system may be required.  Generally speaking, it’s a fairly simple process.

Renewal rates are currently running in the 15-20% range, which tells you how much the claim activity for situations covered under these policies is growing.

What Do I Do if I’ve been Hacked?

The carriers are typically extremely responsive.  Many have hotline numbers for cybercrime issues.  They’ll be able to walk you through specific steps and safeguards.  They’ll begin examining the situation and depending upon the policy, help you to begin working toward restoring your access.

Types of Business Insurance Available through Gallagher

Beth provides an overview of various policies a small business owner might consider.

General Liability – This covers damages for which you and/or your business are liable.  Examples might include a broken item resulting from something an employee damaged.

Property and Contents – If you do a buildout, you often may have to insure the buildout.  In other cases, you’re probably required to insure the items inside your building.

Commercial Auto – If the business has vehicles, you’ll need coverage on them.

Non-Owned and Hired – This coverage can protect you if you’ve hired someone to do a task or job for you.  This can also cover your employee if he/she is doing a task on behalf of the company.

Workers’ Compensation – If you have employees, you’ll be required to carry a workers’ comp policy.

Professional Liability – This covers a variety of issues.  It protects you for services you may provide, or may have neglected to provide, should it cause damage to a client, patient, etc.

Your insurance agent needs to take time to review your business and understand where gaps may exist.  These gaps can lead to significant areas of legal and financial exposure.  Gallagher has access to about 25 commercial line carriers and 8-9 personal line carriers.

To Contact Beth Combs at Gallagher

Phone:  (502) 415-7053

To Contact David Goheen at Gallagher

Phone:  (502) 415-7039

Visit Their Website:  www.AJG.com

Thanks to Beth and David for taking time to provide this valuable information.

Thank you for taking the time to listen to this episode.  From more information on business-related issues, visit my website at www.JimRayConsultingServices.com.

Got Podcast?

Finally, if you’re interested in developing and launching a podcast for your business or organization, I’d be happy to help.  I provide this service on a regional basis.  Visit my podcast production services page for more information.

Until next time, remember, if you need help with your small business, Let’s Grow For It!