According to the Department of Homeland Security, 31 percent of all cyber-attacks targeted small businesses, and nearly 59 percent of small and medium-sized U.S. businesses do not have a contingency plan for responding to a data breach. Typically, during a data breach, a computer screen will go blank and a message requesting money, usually in the form of Bitcoin—an online currency—will appear. Bitcoin transactions are untraceable, making it perfect for hackers to perform cyber extortion.
Upgraded network security, backup systems and improved data storage protocols and contingency plans can protect a firm’s information from being lost or stolen, however, only to a certain extent. Cyber liability insurance policies can offer businesses protection by covering costs associated with cyber-attacks, including network and digital damage, business interruptions, credit monitoring, legal defense and any loss resulting from identity theft. Policies may or may not cover costs associated with reputational damage. There are a growing number of insurance carriers offering cyber and privacy liability coverage.