Do law firms need cyber insurance? The answer is yes. But why and what do law firms need to know to make the right decision about their coverage? Find out.
Do fish need water? Do humans need air? Do law firms need cyber insurance?
To avoid oversimplifying the answer to the question, yes. Cyber insurance should be seen as essential. That’s because cyber risk is an inherent part of the job, 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.
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.
1. Phishing
Phishing may be the most common type of cyber threat. It can be text messages, deceptive emails, and websites that deceive individuals into downloading malware or giving up personal information. 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.
2. Malware
Malware is another cyber threat 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 reputable website. An infected USB drive or visiting a website infected with malware can also spread the virus to your devices. It’s so common that 94% of organizations have reported email security incidents.
3. Distributed Denial of Service (DDoS)
A distributed denial of service (DDoS) attack occurs when multiple devices flood a target system, network, or website with a high volume of traffic. It 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.
Of course, there are other forms of cyber threats, 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.
Quick Read: Top 5 Emerging Cyber Threats and Insurance Solutions.
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. Check out the video below for even more info if you have time.
A cyber insurance policy and security measures must be fundamental to 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 and lawsuits that may arise from one.
Cyber insurance for your law firm will allow you to reduce the reputational and operational damage your business will experience in the event of an attack. It can pay for 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 risk involves the direct financial impact of a breach or cyberattack on 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 risk involves liability claims against your business in case of a breach. Coverage will apply to the defense and result of lawsuits during a cyberattack.
Law firms can opt for first-party, third-party, or a combination of both. Not sure what’s best for your business? To chat with one of our live experts and get advice, 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 decide. You can also read our blog post on what cyber liability insurance is to grasp the fundamentals.
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 cover property damage or intellectual property theft. 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 improving cybercrime protection for your business that will help you identify risk factors within your company — 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 significant 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. Also, 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 your own case.
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. Taking the proper precautions and spending money upfront could save you much more in the long run.
Quick Read: The True Cost of a Data Breach.
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. A tailored cyber insurance policy not only provides a financial safety net in the event of a breach but also shields your firm’s reputation and helps ensure uninterrupted operations. However, not all insurance policies are created equal.
It would help if you had a provider who understands the unique risks law firms face and offers comprehensive coverage designed to address them.
This is where Mitigata comes in. At Mitigata, we specialize in offering cyber insurance solutions tailored to the specific needs of law firms. Whether you’re a boutique practice or a large firm handling sensitive, high-stakes cases, we protect against first-party and third-party cyber risks. Our policies cover ransomware payments, forensic investigations, legal fees, and business interruption losses.
Beyond just insurance, Mitigata is your partner in building a robust cyber risk management strategy. With us, you’ll have peace of mind knowing you’re prepared for the unexpected. Ready to secure your practice against the ever-evolving landscape of cyber threats? Contact us today and let Mitigata be your trusted ally in cyber resilience.
