Cyber Insurance Claims Examples for Data Breach and Cyber Attacks

Data breaches and cyber attacks can be devastating to businesses and individuals alike. A single data breach can result in significant financial losses, damaged reputation, and lost business.

In 2017, Equifax, one of the largest credit reporting agencies in the US, suffered a massive data breach exposing sensitive information of over 147 million people.

Cyber insurance can help mitigate the financial impact of such incidents. Cyber insurance policies can provide coverage for data breach response, notification, and credit monitoring expenses.

The average cost of a data breach is estimated to be around $3.86 million, according to a study by IBM and Ponemon Institute.

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A ransomware attack on a recruitment agency cost them $430,000 to restore their system and cover loss of business income.

The agency was lucky that no personal information was compromised, but the cost of restoring their system over two weeks was a significant $80,000.

Data breach response costs can add up quickly, including hiring a digital forensic expert, customer notifications, and consumer credit monitoring services.

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In one case, a private healthcare clinic was threatened with a ransom payment of $13,220 in Bitcoin after patient information was stolen.

The clinic's cyber insurer helped them fix the vulnerability and verify the hacker's claim, and ultimately connected them with a crisis communications consultant to notify affected parties.

The cost of the IT forensics team and crisis communications company were covered under their cyber liability insurance policy, leaving the clinic to only pay their deductible.

Cyber insurance can cover a wide range of costs associated with a cyber attack, including fines and penalties for non-compliance with regulations like the Payment Card Industry (PCI).

Business email compromise (BEC) and Business Communication Compromise (BCC) are expected to see a sharp increase in 2024 and beyond, with scammers using email and other communication platforms to deceive employees into making unauthorized payments or sharing sensitive data.

BEC remains a top attack vector, requiring virtually no technical knowledge and reaping high rewards. It's not just email that's used, but also social media channels.

CEO fraud attacks are a common example, where hackers pose as executives and instruct employees to transfer money, often using convincing fake phone calls or digital meetings.

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Social engineering is a type of cyber threat that can be devastating to businesses. It involves tricking employees into performing certain actions that compromise the security of the company.

A law firm's financial controller fell victim to a social engineering scam when a caller from the bank asked for the firm's password and pin code to freeze an account. The controller provided the information, which was later used to transfer funds to overseas accounts.

Social engineering attacks can be carried out through various means, including phone calls, emails, and even in-person interactions. In one instance, a financial controller of a law firm received a call from what they believed was their bank, only to learn later that it was a scam.

Cyber liability policies can provide coverage for social engineering attacks, as seen in the case of the law firm. They were able to recover the stolen funds, minus their policy deductible.

Social engineering attacks can result in significant financial losses, as seen in the case of the transport company that lost $106,000 due to a scam involving a supplier's email account being compromised.

Data breaches are a serious concern for businesses and individuals alike. Cyber attackers can steal sensitive information, such as patient data, from computer systems.

A data breach can happen to anyone, as seen in the case of a private healthcare clinic that was targeted by hackers who stole patient information. The clinic's cyber insurance helped cover costs associated with hiring a digital forensic expert to investigate the breach.

Customer notifications and consumer credit and fraud monitoring services are also crucial in the aftermath of a data breach. Cyber insurance can help cover these costs as well.

In some cases, hackers may threaten to post stolen data publicly unless a ransom is paid. However, paying the ransom is not always the best option, as seen in the case of the private healthcare clinic that chose not to pay the hackers' demand of $13,220 in Bitcoin.

Cyber liability insurance can help businesses respond to data breaches by covering costs such as IT forensics and crisis communications. The clinic's insurer connected them with a crisis communications consultant who helped them notify all affected parties.

Businesses can also be held liable for failing to prevent a data breach, as seen in the case of an IT consultant who left data unsecured on Amazon Web Services. Cyber liability insurance can help pay for legal defense costs and settlements in such cases.

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Cyber liability insurance covers incident response costs associated with data breaches and cyberattacks, including recovering important data and hiring legal representation. This type of insurance is essential for businesses that handle personally identifiable information (PII) for customers.

There are two types of cyber liability insurance coverage: first-party and third-party. First-party coverage is recommended for businesses that collect personal information, such as customer credit card numbers or email addresses, and can help cover costs related to a data breach or cyberattack that directly impacts the business.

Third-party cyber liability coverage helps pay for legal costs when a client sues a company for failing to prevent a data breach or cyberattack at their company. This insurance is recommended for technology businesses that make software recommendations to clients or are responsible for their network security.

Liability refers to the responsibility to pay for damages or losses caused to others. First-party cyber liability insurance can help cover costs related to a data breach or cyberattack that directly impacts your business.

For another approach, see: Electronic Data Liability Coverage

You can often add this coverage to your general liability insurance. Businesses that collect personal information, such as customer credit card numbers or email addresses, are recommended to have this coverage.

First-party cyber liability insurance can help cover specific costs like notification and credit monitoring services for affected customers. This can be a significant expense, especially for small businesses.

Third-party cyber liability coverage helps pay for legal costs when a client sues your company for failing to prevent a data breach or cyberattack at their company. This is particularly relevant for technology businesses that make software recommendations to clients or are responsible for their network security.

Over half of small to mid-sized businesses cannot recover following a data breach, making it essential to have a robust cybersecurity system and team in place.

Cyber liability insurance covers your incident response costs associated with data breaches and cyberattacks, including the cost of recovering important data and hiring legal representation.

There are two types of cyber liability insurance coverage: first-party coverage and third-party coverage. Most businesses need first-party cyber liability insurance to defend against their own cyber risks, especially if they handle personally identifiable information (PII) for customers.

First-party cyber liability insurance can help cover costs related to a data breach or cyberattack that directly impacts your business, such as hiring a digital forensic expert to investigate the breach and customer notifications.

Third-party cyber liability coverage helps pay for legal costs when a client sues your company for failing to prevent a data breach or cyberattack at their company.

The average cost of a data breach is $4.24 million, with rising ransomware demands, legal fees, regulation fines, communication costs, and IT forensic expenses adding up quickly.