Because of the recent rash of ransomware attacks, businesses of all sizes are more concerned than ever about the risks of cyberattacks on their business. Yet a sizable portion of small business owners think they are less at risk for such attacks. According to a forthcoming study conducted by Embroker, 63 percent of small business owners believe they are unlikely to face a ransomware attack. The same study showed that only 28 percent of these business owners have coverage for cyber crimes. But these companies are at risk: according to the U.S. Department of Homeland Security, 50 to 70 percent of ransomware attacks are aimed at small and medium-sized companies.
The study also looked at technology startups and revealed that founders are more aware of the risk of cyber crimes that exist today, yet still lack sufficient coverage. 58 percent of founders believe they are likely to be targeted by a cyberattack, but only 34 percent of these companies have cyber insurance coverage.
Embroker’s new Cyber Insurance product covers both first and third-party financial losses resulting from data breaches and other cyber crimes that may compromise sensitive company and customer information. The new digital product includes many protections, including the following:
- Privacy liability: Protects your company from liabilities resulting from a cyber incident or a privacy law violation.
- Data breach response and forensics: Provides coverage for costs associated with responding to a data breach and digital forensics services that help the company determine the size and scope of a data breach. These costs can include the cost of notifying victims, offering them credit monitoring, covering the cost of reputational damage and any civil damages that may result from the breach.
- Social engineering: Provides coverage for any claims and costs resulting from social engineering attacks on a company’s executives or employees.
- Extortion (ransomware): Provides coverage for any claims and costs resulting from ransomware attacks that cripple a company’s operations and extort money in order to restore those operations.
- Business interruption: Provides coverage to replace any income lost in the event that a company’s business or operations are halted due to a cyber attack or incident.
Embroker’s new Commercial Crime Insurance product covers claims and losses due to crime-related issues committed by both employees and outside entities. The product’s first-party coverage protects a business from its own losses occurring as a result of some type of criminal activity. Its third-party coverage extends to a business’ clients from loss caused by theft resulting from the policyholder’s employees.
Embroker’s new commercial crime product includes the following protections:
- Core crime coverage: Covers a business from internal threats of thefts committed by staff members, both full and part-time. Core crime coverage also covers external threats such as robbery, burglary, forgery of financial instruments or ransomware attacks.
- Virtual mailbox coverage: Covers loss of money and securities as the result of theft due to your virtual mailbox provider.
- Source code theft: Protection from source code theft is relatively rare in commercial crime policies. Embroker’s product covers costs for a forensic investigation for a criminal incident in which an employee has stolen its company’s source code.
- Employee counseling: While many employment practices liability insurance (EPLI) policies cover employee counseling for workplace violence, very few crime policies cover this cost in the case of a robbery. Robberies at small businesses can have a more direct impact on employees, so Embroker is introducing coverage for the cost of counseling for employees when there is a robbery. This is designed to assist employees that are experiencing stress or other emotional impact of the incident.
“As digital transformation creates an even larger footprint of vital data, applications and operations for companies, and as remote workforces decentralize companies’ network infrastructures, businesses are experiencing new and continually increasing risks,” said Matt Miller, Embroker CEO. “Further exacerbating the situation is the rise of ransomware attacks. This is why it is critical for Embroker to provide new insurance products that deliver strong coverage for cyber and other crimes.”
Embroker recently hired Steve Prymas as its new Chief Insurance Officer. Prymas brings over 20 years of experience to the company, having served as Vice President, Specialty Lines Manager, and most recently, Global Chief Underwriting Officer of Cyber for Gen Re. Previously he served at The Hartford for 17 years, with increasing responsibility ultimately culminating in his position as Vice President, Head of Hartford Financial Products.
“Cyberattacks and commercial crime are not targeted to just the deep pockets of large companies. Small and medium-sized businesses are at great risk as well,” said Steve Prymas, chief insurance officer at Embroker. “And these businesses are more likely to suffer a bigger blow from these attacks. An estimated 60 percent of small businesses fail within six months of an attack, and another 80 percent are subject to repeat attacks. Now more than ever, it is crucial for small businesses to transfer the financial risk associated with these crimes and not only maintain business continuity, but protect the livelihood of their company.”
