This is where cyber liability insurance comes into play. Today, cyber liability insurance is a necessity to protect businesses, their clientele, and reputations.
What is Cyber Liability Insurance?
Cyber liability insurance is an essential tool businesses can use to prevent financial disasters. It is designed to cover your business’ liability in the event of a data breach or other cyber-attacks involving sensitive customer information such as social security numbers, financial information, driver’s license numbers, and health records. This could happen in an event as simple as having a laptop stolen.
Who Should Have It?
In short, any business that stores sensitive data in the cloud or on any electronic device should have cyber liability insurance. Usually, a general liability insurance policy will include basic cyber liability coverage. However, businesses that store personally identifiable information (PII) for employees or customers should have stand-alone or optimized cyber liability insurance. PII includes any data that can be used to identify a particular individual, such as name, date of birth, email address, social security number, credit card number, or bank account number.
What Does it Cover?
Cyber liability coverage can vary based on which insurer you’re purchasing the insurance from. The reason is that there’s no such thing as a standard when it comes to cyber liability insurance. Insurers have started offering cyber coverage only within the last couple of decades. Most insurers offer two types of coverage within a cyber liability policy:
First-party Coverage
This coverage pays for immediate expenses that a company incurs after a data breach. This could include:
- IT forensics
- Crisis media relations
- Notification costs
- Credit monitoring costs
- Breach redemption costs
- Cyber business interruption
- Digital asset damage
- System failure
- Fraud
- Telephone hacking
- Reputational harm
- Dependent business interruption
- Social engineering (Not all cyber liability policies cover social engineering. This may come with a smaller coverage limit, or could be an optional add-on)
- Cybercrime
- Client phishing fraud
- Business interruption waiting period
- Cyber extortion/ransomware
Third-party Coverage
This covers damages if a business’ customers or partners are affected by the cyber-attack and can help the company defend against lawsuits and legal claims. This could include:
- Cyber/privacy liability
- Media liability
- Regulatory defense
- Regulatory fines
- PCI fines/penalties
- PCI assessments
- Management liability
- Defense outside the limits
- Contractual liability
On top of first and third-party coverage, some insurance companies can also provide risk mitigation services to help you identify and combat cyber threats before they happen.
Conclusion
Cyber liability coverage is still very much an evolving area of insurance. Since insurance companies are still relatively new to this area, there isn’t always a lot of clarity around what cyber liability insurance covers and doesn’t. That’s why it’s essential to read through your entire policy before committing, preferably with the guidance of an insurance professional or broker. With the right cyber liability policy, you can avoid the financial and reputational harm to your brand that could result from a data breach or other cyber attack.
Why Choose Us?
Cyber Security Insurance Group was founded to accomplish a single mission: to provide Texas businesses with the proper insurance coverage to protect them against cybercrime. Our founders have combined 20+ years in the Information Technology field and 20+ years in the Insurance industry to ensure our clients are quoted the correct policy based on their unique technical environments. We will help you understand your business’s technology which will allow for proper insurance coverage.
Cyber liability insurance is hard enough to understand. Don’t leave your business’s cyber protection to just any insurance agency. Cyber Security Insurance Group performs a thorough technical risk questionnaire with each client to ensure their policy will contain the proper coverage. We help our clients fully understand today’s cyber threats, their network’s resilience to those threats, and how to obtain the necessary insurance coverage to protect their company in the event of a cyber-attack. Contact us today for more information on costs and coverage.
