Technology has become an integral part of our everyday lives. From business to personal use, technology has revolutionized the way we communicate, work, and live. However, with the increasing dependence on technology comes the risk of cyber threats and data breaches. This has led to a surge in demand for information technology (IT) liability insurance, which protects businesses from the financial losses associated with technology-related lawsuits. But how do you know if your IT liability insurance is up-to-date? In this post, we will explore 7 signs that it’s time for an upgrade.
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According to a report by the Australian Cyber Security Centre, cybercrime costs Australian businesses an estimated $29 billion annually.
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1. Outdated Policy Coverage:
Technology is constantly evolving, and so are the risks associated with it. What was sufficient coverage 5 years ago may not be enough today. When reviewing your policy, ask yourself if it covers modern cyber threats like ransomware, phishing, and malware attacks. If your policy hasn’t been updated in a while, it’s time to speak with your insurance provider and explore your options for increasing coverage.
2. Your Company Has Expanded:
If your business has expanded in terms of revenue, employees, or physical locations, you may need to increase your IT liability insurance coverage. More employees mean more endpoints, which means more potential cybersecurity threats. And more revenue means more assets to protect. If you’ve opened a new office or store, you need to ensure your insurance policy covers the new location’s IT risks.
3. Regulatory Changes:
Laws and regulations governing data privacy and security are constantly changing. If your business operates in an industry subject to regulatory oversight, you may be required to carry a certain level of IT liability insurance. For instance, if you bought your policy before the rise of cloud computing, it may not cover cloud-related data breaches or cyber-attacks. You need to review your policy regularly and ensure it evolves with your business’s IT needs.
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The average cost of a data breach in Australia is estimated to be $3.35 million, according to a report by IBM.
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4. You’ve Had a Security Incident or Data Breach:
If your business has experienced a security incident or data breach, it’s time to review your IT liability insurance policy. Your policy may not sufficiently cover the costs associated with these incidents, such as forensic investigations, breach notifications, and legal fees. You may need to increase your coverage or add additional policies, such as cybercrime insurance or errors and omissions insurance.
5. Mergers and Acquisitions:
If your business has recently undergone a merger or acquisition, your IT liability insurance may not be sufficient to cover any new risks associated with combined technology infrastructures. It’s important to review your policy and speak with your insurance provider to ensure that all potential risks are covered.
6. Changes in Business Partners:
If your business partners or vendors change, it might be time to review your IT liability insurance. Any new partner or vendor could bring new risks to the table. Before engaging in any business relationships, it’s important to ensure that your liability insurance policies match the requirements of your new partners or vendors.
7. Your Policy Has Low Limits or High Deductibles:
Finally, you need to review the limits and deductibles of your IT liability insurance policy. If your limits are too low, you may not have enough coverage to pay for the costs associated with a major data breach or security incident. If your deductibles are too high, you may not be able to afford to pay them in the event of an incident. You need to strike the right balance between adequate coverage and manageable costs.
Conclusion:
IT liability insurance is crucial for protecting your business’s assets and reputation in an increasingly digital world. However, you can’t just buy a policy and forget about it. You need to review your policy regularly to ensure it covers all of your IT risks and evolves with your business’s needs. Use the 7 signs above to determine if it’s time for an upgrade. And remember, it’s always better to have too much coverage than too little. After all, cyber criminals are constantly evolving their tactics, and your insurance policy needs to keep up.
