The Need for Cyber Liability Hits Home in Pensacola

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June 5, 2024 - Joe Nelson, Agent

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Why you need cyber liability insurance

In May 2024, Ascension Sacred Heart Hospital faced a severe cyberattack that disrupted essential services, including electronic health records and appointment systems. Non-emergent procedures were paused, and emergency services were diverted due to system outages​ (Home)​.

The Disruption and Its Costs

Cyberattacks seem far fetched to many business owners. It is easy to understand when a large operation in a major market is disrupted, but it hits home when a local hospital is affected and the resulting outage could have resulted in lost lives. In addition attacks like this could cost millions to mitigate and restore. Besides financial implications, the impact on patient care and operational efficiency can be profound. Ascension's experience underscores the necessity for robust cybersecurity measures and insurance.

What is a Cyber Attack?

Let's first define a few terms we will use below.

Phishing: A cyber attack where attackers impersonate legitimate entities to trick individuals into providing sensitive information like passwords or financial details.

Ransomware: Malicious software that encrypts a victim's data, with attackers demanding a ransom payment to restore access.

Malware: Any software intentionally designed to cause damage to a computer, server, or network, including viruses, worms, and spyware.

Denial of Service (DoS): An attack that overwhelms a system, network, or website with excessive traffic, rendering it unavailable to users.

A cyber attack is a deliberate attempt by hackers to breach information systems, often to steal, alter, or destroy data. These attacks can involve various tactics such as phishing, ransomware, malware, and denial-of-service attacks, aiming to disrupt operations, extract sensitive information, or demand ransom. Cyber attacks pose significant risks to businesses, requiring robust security measures and preparedness to mitigate potential damage.

The most common impacts are:

Data Theft: Stealing sensitive customer and business data.

Financial Loss: Ransomware attacks demanding payments, and costs for remediation.

Operational Disruption: Downtime affecting business operations and services.

Reputation Damage: Loss of customer trust and potential legal liabilities.

What is Cyber Liability Insurance?

Cyber liability insurance is a specialized insurance policy designed to help businesses manage the risks associated with cyberattacks and data breaches. Here are its key components:

1. Coverage for Data Breaches: This includes costs related to notifying affected individuals, credit monitoring services, and legal fees.

2. Business Interruption: Compensation for income lost due to a cyber event disrupting normal operations.

3. Cyber Extortion: Coverage for ransomware attacks, including the costs to respond and potentially pay the ransom.

4. Legal Support and Defense: Coverage for legal fees and court costs if the business is sued due to a data breach.

By providing financial protection and access to cybersecurity experts, cyber liability insurance helps businesses recover quickly from cyber incidents, ensuring continuity and minimizing disruptions.

Don't let a cyber attack take your business offline

Mitigation and Prevention Through Cyber Liability Insurance

Cyber liability insurance provides financial support and resources to quickly respond to cyber incidents. According to Evolve MGA, one of our cyber liability brokers, such insurance covers costs related to data breaches, including legal fees, notification costs, and business interruption losses. It also offers access to cybersecurity experts to mitigate damages promptly, reducing downtime and protecting business continuity.

Why Business Owners Need Cyber Liability Insurance

For businesses of all sizes, cyber liability insurance is an essential safeguard. It helps manage the risks and costs associated with cyberattacks, ensuring that businesses can recover swiftly and maintain trust with their clients. As cyber threats continue to evolve, investing in comprehensive cyber liability insurance is not just prudent but necessary.

Protect Your Business with Nelson Insurance Agency

Don't wait until a cyberattack impacts your operations. Contact Nelson Insurance Agency to discuss the cyber liability insurance options available to protect your business. Our team of experts will help you navigate the complexities of cybersecurity and find the right coverage to ensure your business's resilience and peace of mind.

Visit Nelson Insurance Agency to learn more and schedule a consultation today to discuss what cyber liability option works for you.