Does Cyber Coverage Help Re-Create Lost Data?
UNDERSTANDING DATA RECOVERY VERSUS DATA RE-CREATION
Every business relies on data, whether customer data, financial data, or simply its own intellectual property. While many companies follow best practices for both data security and data storage, the impact of a cyber incident can often be more significant than expected, with the financial burden of ransomware attack.
Cyber risk often impacts businesses or companies in unexpected ways. For example, a professional design firm lost access to all its valuable data, including the firm’s technical drawing, prints, and complex design specifications. The firm was under the assumption that cyber risk coverage would cover all types of exposure, including loss of proprietary intellectual data, and did not realize the differences between re-creating or recovering of data. It was a tedious and arduous process that could have been avoided by having the right coverage in place for the business.
Here are a few takeaways of how a cyber risk policy helps calculate and cover the financial loss associated with total data re-creation:
- Even if a business does not store personal data, it is likely to have cyber exposure at various levels.
- Any business or company that relies on computer systems to generate or store critical business and client information is vulnerable to cyber risks, whether they lose or are unable to access proprietary digital files.
- There is an essential difference between data recovery and data re-creation. Many cyber policies will only cover the costs to recover data from backups, not the cost to re-create data. Obtaining cyber risk insurance that provides appropriate coverage and re-creates data from inception, is key towards protection of business or company with related exposure(s).
The following are three core coverages for cyber risk insuring agreements:
- Privacy notification and crisis management coverage
- Regulatory defense and penalties coverage
- Information security and privacy liability coverage
If you need help evaluating cyber risk coverage or developing safeguard controls, JLK Rosenberger can help. Please contact us at 858-617-0675, or click here, and we will contact you.