Financial Problems Caused by a Data Breach

With the influence of technology in all areas of the economy, few industries are immune to the threat of cybercrime. Many companies mistakenly assume that the financial industry is the most susceptible to cyberattack because of the funds and personal information used and stored on cloud-based servers, but as Caitlin Morgan Insurance warns, anyone who takes online payments, stores information digitally, or relies on electronic communication is at risk. A cyber liability insurance policy is one way to address these concerns.

The Cost of a Data Breach

Although there is loss associated with whatever is destroyed or taken during a data breach, there are several other areas that can financially devastate a company. These include:

The costs associated with repairing the physical security features of the business.
The loss of profits due to company shutdowns.
Reduced profits due to client loss and damaged company reputation.
Expenses association with notifying all stakeholders, clients, regulatory agencies, legal teams, and law enforcement.
By carrying a comprehensive cyber liability policy, there is financial assistance in the event of a breach. These policies are designed to assist with the losses experienced, as well as partially cover the cost of legal or settlement requirements. These services vary according to the policy.
It is unwise to think your company is safe from cyberattack. The use of tablets or devices, servers, and digital communication makes every business a target for hackers and the dark web.