Cyber Liability: The Ultimate Revenge of the Nerds
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Cyber Liability: The Ultimate Revenge of the Nerds

Today's business world is full of rapidly advancing technology and innovation, and it can be hard for small businesses to keep up with the cutting edge. If you're not careful, though, you might end up facing serious cyber liabilities when you suddenly find your technology — and business — vulnerable to a data breach.

For the past half century, nerds of every shape and size have powered the unstoppable march of computerization across the globe. Every day intellectual and analytical minds devise new ways to do business, new technologies to streamline industry efficiency, and new gadgets for consumers and professionals to use. It used to be that the words "geek" and "nerd" were insults hurled at the most uncool kids in school. Today, these words describe the wealthiest and most influential business leaders in the world.

But there's a dark side to this empire of nerds. For every Jedi Knight there is a Sith Lord. For every Gandalf there is a Saruman. For every advance in business technology there is an unscrupulous hacker ready to wreak havoc from the anonymity of the web.

What Is a Cyber Liability?

A liability in general refers to fault. A person who is at fault is liable to another because of his or her actions or failure to act. For example, the person who is at fault for causing an automobile accident might be liable for damages.

When a business's actions or failure to act result in a data breach, that business can be liable to a third party.

In other words, a business can be at fault for allowing information to be accessed by an unauthorized person and causing losses to customers and clients. Cyber Liability Insurance can help cover the cost of related lawsuits and damages.

And now that none of us can imagine life without nerd gear like computers that fit in our pockets, such lawsuits are only going to increase in frequency.

Examples of Cyber Liabilties

Businesses of all sizes have cyber liability if they process, store, or otherwise handle customer or client data. Here are some things that expose a business to cyber liability:

  • Credit cards. Most businesses today accept and process credit card payments. To do so, they need to store credit card numbers and names of holders, and they usually do so digitally. If the digital storage is improperly secured, however, it can easily be breached by hackers.
  • Wi-Fi. Offering free Wi-Fi is good customer service, but it also opens the door to cyber crime. Help protect your users by keeping your Wi-Fi password-protected and requiring users to agree to terms of service that prohibit wrongdoing, which may limit your liability.
  • E-Commerce websites. Shopping online is standard these days, and many small businesses offer e-commerce sites. If a business allows online transactions, it's responsible for encrypting and storing user data. Failure to do so can result in hackers obtaining credit card information, usernames, and passwords.
  • Employee data. Social Security numbers, bank account numbers, addresses — all of these are valuable to hackers. And they're all commonly held by employers. Be sure to encrypt data on your employees and limit internal access to the data to people who need that information.
  • Medical records. Healthcare information is particularly valuable to hackers, and HIPAA laws penalize breaches of medical information with especially high fines. Any business with patient information on its books should get serious about data security.

Being aware of these potential liabilities is crucial for a small-business owner to stay protected. But even intense security measures won't prevent every data breach. A bug in encryption coding (like Heartbleed) may go unnoticed for some time, leaving sensitive data vulnerable to breaches. In the event of a lawsuit, a business using the vulnerable technology may be found liable.

Having Cyber Liability Insurance is important for mitigating the costs of such liabilities in the event of a data breach or lawsuit.

If your business handles sensitive data in any way, fill out an application and receive free quotes for Cyber Liability Insurance. You and your business should benefit from the advancements of the world's nerds, not fear them. Excelsior!

Cyber Liability Insurance: Further Reading