Small to medium-sized businesses store sensitive personal information for their clients, customers, and employees. They may be more vulnerable to cyber attacks than larger companies with more highly developed security infrastructures. A cyber attack can disrupt the continuity of your business and lead to a costly recovery process. Your business insurance policy may not protect you fully unless it includes cyber liability coverage.
What Is Cyber Liability Insurance?
Cyber liability is a specialty insurance product designed to protect businesses from internet-based risks and from risks relating to information technology (IT) infrastructure and activities. This coverage can protect your business against computer or technology-related losses, such as phishing or ransomware attacks, or in case a laptop or mobile device containing sensitive information is lost or stolen.
What Does Cyber Liability Insurance Cover?
The damage your business suffers because of a cyber security breach is covered by cyber liability insurance. This may include investigative services and identity recovery, which includes the costs of regaining control of identity information after a theft. It will also cover the costs involved in recovering your company’s data after a breach. This insurance covers damage because of a cyber-attack on your customers or business partners, including customer notifications, legal fees, and settlements.
Many cyber liability insurance policies will cover:
- Funds lost due to fraudulent instruction by a third party
- Lost business income and recovery costs due to a data breach or ransomware demand
- Costs of compliance with regulatory requirements and fines
- Costs of defense against lawsuits
- Expert breach response services
Who Needs Business Cyber Liability Insurance?
If your business accepts credit cards, maintains a website, uses computers and/or mobile devices, or collects or stores customer data, you are vulnerable to a cyber attack. Sensitive data may include names, email addresses, phone numbers, addresses, social security numbers, and other personal information. In the event of a data breach, you may be liable for the costs of notifying affected parties and providing credit monitoring to those parties if your data has been compromised or lost.
You could lose money through fraudulent phishing or receive a ransomware demand from hackers. All types of small businesses can be targeted by cybercriminals, including online retailers, consultants, bookkeepers, accountants, and medical practitioners.
In What Scenarios Could You Need Cyber Liability Insurance?
Cyber liability coverage can help protect your business in a variety of cyber threat scenarios, including:
- Data breaches
- Cyber extortion threats
- Suspected network intrusions
- Denial of service
- Network outages
- Security or network wrongful acts
Among other things, it can cover a ransom you are forced to pay to regain access to your data, protect you from lawsuits filed by customers or employees because of privacy breaches, and cover your public relations costs to restore your company’s reputation after a data breach. With cybercriminals becoming more sophisticated and organized today, it is more complicated than ever for businesses to protect their data. Speak with our knowledgeable agent about including cyber liability coverage in your business insurance package.