Do Law Firms Need Cyber Insurance?
Do fish need water? Do humans need air? Do law firms need cyber insurance?
Not to oversimplify the answer to the question, but yes. Cyber insurance should be seen as essential. That’s because cyber risk is an inherent part of the job these days, and the total cost of damages incurred by cybercrime is expected to reach $10.5 trillion by 2025.
But you don’t have to panic. That is, if you have a cyber insurance policy in place. You don’t? Well, we’ve got you covered. Here’s everything you need to know about what cyber insurance for your law firm will cover, what it won’t, and how to get it.
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Common Kinds of Cyberattacks
Before we get into the details of cyber insurance for your firm, let’s take a quick look at the types of cyberattacks you may face.
Phishing may be the most common type of cyber threat. Phishing can take the form of text messages, deceptive emails, and websites that deceive individuals into downloading malware or giving up personal information. And within the phishing category you can encounter different kinds of attacks.
Spear phishing leverages information from social media, public databases, or previous breaches to gain entry to your sensitive information. Whaling is another form of phishing that targets senior or high-profile employees. Smishing or vishing entails making phone calls or leaving voice messages while pretending to be a reputable source.
Unfortunately, as artificial intelligence (AI) grows in popularity and sophistication, each of these methods is becoming more difficult to spot — even for the most tech-savvy among us.
Malware is another cyber threat that is usually distributed through malicious websites, emails, and software. It can be hidden in document files or unusual format files. Users can unintentionally install malware when they click on a link in a phishing email, or when they download and install software from a website that is not reputable. An infected USB drive or visiting a website that is infected with malware can also spread the virus to your devices. It’s so common that 94% of organizations have reported email security incidents.
A distributed denial of service (DDoS) attack occurs when multiple devices are used to flood a target system, network, or website with a high volume of traffic. A DDoS attack acts like an unexpected traffic jam clogging up the highway — it prevents regular traffic from arriving at its destination. This tactic overwhelms the target’s capacity to handle legitimate requests, rendering it inaccessible to legitimate users.
There are other forms of cyber threats of course, but the above are the most common. You can imagine encountering one or more of these attacks in your day-to-day line of work. If you haven’t already. Here’s what a cyber insurance policy can do to help.
What Cyber Insurance Covers and Why Law Firms Need It
Cyber insurance for law firms should be a given, a requirement, a non-negotiable. As a lawyer, we know that you love to exercise all possibilities. So, let’s go through the facts. If you have time, check out the video below for even more info.
A cyber insurance policy and proper security measures must be fundamental components of your law firm’s risk management strategy. In the event of a data breach, ransomware, or other cyberattack, you’ll receive financial coverage for the direct cost of harm toward your business as well as lawsuits that may arise from one.
Having cyber insurance for your law firm will allow you to reduce the reputational and operational damage that your business will experience in the event of an attack. It can pay for the cost of prospective lawsuits, credit monitoring services, data breach response, forensic investigations, notification to affected parties, legal fees, and other expenses. Additionally, ransomware payments, regulatory fines, and business interruption losses may all be covered by cyber insurance.
There are two kinds of cyber risk that you’ll want to make sure that your cyber insurance policy covers:
First-Party Cyber Risk
This kind of risk involves the direct financial impact of a breach or cyberattack in their network or system. Coverage will apply to fees associated with restoring data, income loss due to downtime, crisis management, forensic investigations, and more.
Third-Party Cyber Risk
This kind of risk involves liability claims made against your business in the event of a breach. Coverage will apply to the defense and result of lawsuits in the event of a cyberattack.
Law firms can opt to have first-party coverage, third-party coverage — or a combination of both. Not sure what’s best for your business? To chat with one of our experts live to get some advice, just click the chat bubble at the bottom right of your screen. Our experts are always here to help, even if you aren’t ready to make a decision just yet.
What Cyber Insurance Doesn’t Cover for Law Firms
Cyber insurance coverage will cover most of the expenses associated with an attack, but typically won’t provide coverage for property damage or theft of intellectual property. And while insurance will help your firm recover, it’s always best to avoid a cyber threat in the first place.
Here’s an article on how to improve cybercrime protection for your business that will help you identify risk factors within your business — you’ll also find advice on creating a risk management plan.
What Happens if You Don’t Have Cyber Insurance as a Law Firm
Not having cyber insurance is a major threat to your firm’s longevity. Law firms are prime targets for cyber attackers because of the amount of personal information they need to handle. As well, operating without proper protection is negligent and could result in fines.
If an attacker accesses personal or confidential information via an email phishing attempt, malware, or DDoS attack, your client’s data is at risk and could be compromised. As a result, they could sue your firm. As a lawyer, you want to represent clients in legal disputes, not be the defendant in a case of your own.
Not to mention that your reputation could be harmed in the process: If news gets out that your firm was attacked and client data was lost, new clients may want to avoid working with you.
Cost of Cyber Insurance for Law Firms
The average cyber insurance cost can hover around $1,500 per year for $1 million in coverage, with a $10,000 deductible. That being said, different firms can pay more or less for their coverage depending on several key factors.
These factors commonly include:
The size of your law firm
The amount of sensitive data you work with
Your annual revenue
Current risk management practices
Your policy terms
If you have had cyber insurance before and are looking for a new provider, share your history with your new provider as soon as possible. Having low or no claims in the past can help reduce your rates. Remember that taking the proper precautions and spending some money upfront could end up saving you much more in the long run.
So, do law firms need cyber insurance? Of course. Just like with the limit on objections in the courtroom, cyber threats within your firm are infinite. Look for an insurance provider who will understand the unique cyber risks and challenges you face so that they can help you design the perfect plan. Make sure the insurance company you’re considering covers the right things, including mitigating losses from data breaches, business interruptions, and network damage.
A+ rated insurance, tailored to your law firm’s needs. As you grow, we protect you.
Get the right coverage for the best price.
Find a Policy
