As the world becomes increasingly digital, the risks associated with doing business online increase—this is especially true for industries such as law firms that house sensitive data.
Law firms are thus highly vulnerable to cyber attacks and have greater liability when it comes to protecting their digital assets. In fact, in 2021, law firms faced the highest ransomware attacks out of any industry by 24.9%.
Although law firms are heavily targeted, lawyers can take preventative steps to fortify their cybersecurity strategy by purchasing cybersecurity insurance. Here’s how this specific insurance can help your law firm stay secure and avoid costly losses.
What Is Cybersecurity Insurance?
Cybersecurity insurance is a type of insurance policy that helps shield businesses from the financial losses that can occur as a result of a data breach or cyber attack. The types of breaches protected by cyber insurance include data breaches, phishing scams, ransomware attacks, and other forms of cybercrime.
Cyber coverage can help pay for expenses such as credit monitoring, data recovery, and legal fees. It can also provide some financial protection in the event that your business is sued because of a cyber incident.
What Does Cybersecurity Insurance Cover?
There are a few different types of coverage that are typically included in cybersecurity insurance policies. Here are some of the most common types of coverage for law firms:
- First-Party Coverage: First-party coverage can help pay for expenses related to a data breach, such as credit monitoring and data recovery. It can also help cover the cost of business interruption, which can occur if your firm is forced to shut down following a cyber incident.
- Third-Party Coverage: Third-party coverage can help protect your business from lawsuits that may arise from a data breach or other cyber incident. It also helps cover the cost of damages that you may be ordered to pay as a result of a lawsuit.
- Cyber Extortion Coverage: Cyber extortion coverage helps protect your business from the financial losses that can occur as a result of a ransomware attack. It can also help cover the cost of ransom payments, which may be required to restore access to your data.
- Cybercrime Coverage: Cybercrime coverage can help pay for expenses related to a variety of cybercrime incidents, such as phishing scams and malware attacks.
Why Law Firms Need Insurance for Cybersecurity
Law firms have endless files of sensitive data such as client data, financial data, and confidential legal documents that could be compromised in a data breach or cyber incident.
Because of the amount of valuable data law firms contain, law firms are prime targets of cybercrime. Cyber criminals hope to access this data to use and abuse, posing as threats to law firms.
Additionally, law firms are often targeted by ransomware attackers because law firms are willing to pay large ransom payments to regain access to their data. In 2021, the average ransom payment was $220,298, a higher average compared to 2020.
Besides data breaches, law firms must meet data regulations. In the United States, law firms are subject to a variety of data privacy and security regulations, including the Gramm-Leach-Bliley Act (GLBA) and the Health Insurance Portability and Accountability Act (HIPAA). These regulations require law firms to take steps to protect the confidential data that they hold. A breach in violations could cost law firms more than $180 per record.
Cybersecurity insurance is an essential part of any law firm’s risk management strategy. Law firms can be sued for the damages that occur as a result of a data breach, but having insurance in place can help offset the cost of these lawsuits.
Already Have Insurance? You Still Need Cybersecurity Measures In Place
Even if you have insurance coverage for your cybersecurity needs, it’s still important to have robust cybersecurity measures in place and work with an MSP. Insurance policies typically have limits on the amount of coverage that they provide and some cyber incidents may not be covered by your policy.
MSPs make it easier for law firms to stay protected from cyber threats and provide the following services:
- A robust firewall
- An intrusion detection system
- Anti-virus and anti-malware software
- Employee training
- Regular backups
- 24/7 monitoring
If you are a law firm that does not have cyber insurance, now is the time to get it. If you already have a policy in place, make sure that you review it to ensure that it provides the coverage that you need. Also, work with an MSP to supplement your policy and help keep your law firm safe from cyber threats.
Partner with Fresh Managed IT
Cybersecurity insurance is an important form of protection for law firms. At Fresh Managed IT, our team of experts can help you implement the right cybersecurity measures and technology to be eligible for cyber insurance or a payout in the event of a cyber incident.