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With many considering 2011 the "Year of the Data Breach," insurers around the country are upping their capacity, getting ready for many more cybercrime and phishing attacks, which can cost tech companies thousands of dollars in lawsuits, reported National Underwriter P&C.
According to the source, tech companies are becoming more aware of the potential liability they face when it comes to safeguarding clients' data, making it more of a necessity for them to invest in a professional liability insurance policy. An insurance policy would protect them in the event of lawsuits due to security breaches or cybercrime.
"Clients have become much more aware of their liabilities associated with losing data," Frank Mobley, CEO of Immedion, told the source. "They are asking us where our responsibilities end and theirs start for protecting data."
Cyber insurance can also also cover liability for electronic and physical records that are hacked, said the magazine.
Companies are also turning to enterprise risk management solutions to help them with with this issue, according to a recent book titled "A Practical Guide To Risk Management," written by Anne Marchetti.