Today I’d like to look at one example of the need for data breach insurance. Although this event took place outside the USA, it shows what can happen when insurance coverage is not available.
Yapizon, a South Korean bitcoin exchange firm, was hacked and the result was a $5 million loss to its users. That amount added up to about 37% of the bitcoin exchange’s total user funds, according to Yapizon’s legal team.
Can you guess how the company decided to handle this disaster?
The answer is that the company announced the losses would be recovered from each and every user’s account.
Yes, that is the truth. The company decided to take 37% of the total balances in all of their user’s accounts. That’s certainly one way to stay in business, for a short time anyway. Do you think this company had the need for data breach insurance?
As you may have guessed, the account holders went crazy. Unfortunately, they have even less rights than we do. Had that happened here, the resulting actions would certainly have made the evening news.
Fortunately for businesses here in the USA, insurance coverage is now available. Data breach insurance would keep the company from going broke or trying to take their customer’s hard earned money.
We’ve looked at data breach coverage in detail in previous posts, so we’ll skip that for now. What I wanted to show that even a business with extremely high security systems in place, can be hacked.
Yes, even they have the need for data breach insurance. A business that is not that technically advanced, is even more at risk. If you’ll remember, the average breach costs a company approximately 6.5 million, when it’s all said and done.
If your business can’t afford to keep high-end security technology in place, does it have 6.5 million? As we have seen, even that technology is no guarantee of safety.
The only real security for a business is to have data breach insurance coverage. The need is now so great, that polices are custom fit to your particular business and needs.
Gone are the days when you have to buy a policy and make it work. The need for data breach insurance has changed the way coverage is bought.
If you need more information on insurance for your business, MrInsurability is only a click away. Give us a try today!