Protect your company from cyber crime.
Cyber liability insurance for cannabis businesses.
As technology evolves – and becomes more widely used – cyber hackers get smarter. It’s important to have a cyber liability policy that will protect your assets if you are the victim of a cyber attack.
Cannabusinesses operate in a growing industry. While that means more revenue and growth opportunities for your company, it also means more risk. Most cannabis businesses rely on technology for daily operations. Whether you are a laboratory that stores testing results online, a manufacturer that communicates with prospective buyers via email or a dispensary that makes sales online, you are at risk for a cyber attack.
Did you know that over 50% of small business owners have experienced a cyber attack? Needless to say, cyber crime is common. Without the right protection, you can be held financially responsible if you become a victim and sensitive information is leaked.
What does cannabis cyber liability insurance cover?
Cyber liability insurance provides protection from financial losses claimed by first and third parties in the event of a cyber attack or data breach
Cyber liability insurance can cover you if:
- Your dispensary’s database is hacked and customers’ social security numbers are stolen
- Your cannabusiness was broken into and your computers and surveillance equipment was stolen
- One of your employees was fired and, in retaliation, stole customers’ banking information from the online database
- You accidentally opened an email containing a virus. The hacker gained access to important company documents and stole money.
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The Internet has spun a whole new web of liability exposures. E-commerce, social networking, cloud storage, and other technologies bring great benefits to large and small businesses alike. But with these benefits also come challenges, including protection of privacy, data, and financial information of your customers. If this information is lost, stolen, or compromised, your company is at risk. In fact, you may even be required by law to alert those impacted by the breach and to pay for any financial loss incurred.
Cyber liability coverage offers protection due to unauthorized access of electronic data or software within your network. It also provides coverage for spreading a virus, computer theft, extortion, or any unintentional act, mistake, error, or omission made by an employee. This coverage is quickly becoming more and more important as you embrace technology to help run your business.
If your company is faced with a data breach or cyber-attack, you may be forced to cover breach-related expenses such as crisis management, hiring a public relations firm to manage a data breach incident, costs associated with forensic analysis, the cost of repairing and restoring computer systems if there is a virus that destroys business software and data, and the loss of business income resulting from a data breach.
First-party coverage will insure your business for losses to your own data or lost income or for other harm to your business resulting from a data breach or cyber-attack. This coverage will pay you for things like business interruption, the cost of notifying customers of a breach, and even the expense of hiring a public relations firm to repair any damage done to your image as a result of a cyber-attack. Having this funding available in the event of a crippling hack can keep the lights on till you’re able to resume your normal business operations.
What would you do if an email virus impacted the operation of your database and prevented you from serving clients for a day or more? Or what if a hacker or cyber-criminal caused a system outage or extended downtime, leaving your business inoperable? These and other events can destroy your ability to serve clients and bring in revenue, which can have a major long-term impact on the viability of your business.
Business interruption insurance compensates you for lost income if your company cannot operate as normal due to disaster-related damage that is covered under your commercial property insurance policy, such as data breach or cyber-attack. Business income insurance covers the revenue you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.
If your business handles sensitive customer data (such as email lists, credit card records or other files), data breaches pose a serious threat to your financial stability. A lawsuit resulting from a data breach means your business is responsible for paying legal fees, court-ordered judgments or settlements and other court-related costs.
Third-party coverage protects you in the event of a lawsuit brought by a customer or partner for a data breach that your business' actions or negligence allowed.
If your business experiences a data breach or violation of confidential information during regular business operations, you may be found in violation of privacy laws and be required to pay fines for the violations or other regulatory issues.
You may be eligible for regulatory claim coverage which would offer protection in response to proceedings related to disclosure laws and other governmental actions that can result in defense costs, fines and/or penalties. Coverage does vary and may be restricted by local law.
If hackers gain control of critical systems, they may demand a ransom be paid to avoid additional consequences. Sometimes these can be empty threats, but it’s impossible to know for sure. Paying the ransom can be costly. Taking a chance by choosing not to pay can sometimes put a company out of business.
Coverage for ransom and cyber extortion can be included in cyber liability policies and can help cover the cost of ransom to regain control of network systems. This is often not included in a standard policy, may include a separate sublimit and deductible, and may require adherence to certain conditions set forth by the insurer.
These are just a few examples of viable cyber liability claims. As technology evolves- and becomes more widely used- cyber hackers get smarter. It’s important to have a cyber liability policy that will protect your assets if you are the victim of a cyber attack.
However, cyber liability insurance policies can vary greatly within the cannabis industry. As a specialized cannabis insurance agency, we work with several leading insurance companies that offer comprehensive coverage for cyber attacks. Deciding what type of coverage you need is the first step. At Reliant Agency, we help you compare high quality, cost-effective policies to find one best suited for your type of cannabusiness.
Reach out today to find out how we can match you with the right cannabis insurance policy.
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