In the past couple years, data breaches have resulted in major fines and legal fees – not to mention headaches – for a discount retail chain, one of the nation’s largest banks, a well-known health insurer, an entertainment network and the federal government.
Cyber Liability is a type of insurance policy that protects businesses from risks associated with the use of computers and technology. Cyber liability risks for businesses can include:
What does cyber liability insurance cover?
Cyber Liability coverage protects your small business from claims that arise from day-to-day business operations such as:
Cyber insurance covers a variety of small business risks that are divided into two parts:
First-party coverage – Covers damages that you and your business suffer because of a data breach. This can include things like investigative services, business interruption coverage and data recovery.
Third-party coverage – Covers damages if your customers or partners are affected by a cyber-attack on your business. This can include legal fees, settlement costs, security failure and media liabilities.
Who needs a cyber insurance policy?
Any business that stores or processes sensitive information like names, addresses, Social Security numbers, medical records or credit card information needs cyber insurance.
Also, any third-party who handles your confidential data and information, such as an accountant or IT service, should have their own cyber insurance policy. Be sure to get proof of coverage before hiring them.
Yes. Your cyber insurance policy covers things such as legal fees and settlement costs - up to the policy limit - in the event of a data breach.
Cyber insurance does not cover losses indirectly caused by a data breach or cyber-attack. So, a loss of intellectual property or damage to your brand caused by a data breach wouldn’t be covered.
Yes. You select the amount of your deductible. A deductible is the fixed out-of-pocket expense you agree to pay before your coverage starts to pay. The deductible applies each time a loss is covered under your cyber policy.
As more small businesses choose to use and store digital data, the need for this coverage has expanded to more than just the healthcare and banking industries. A few of the many businesses that should consider a cyber policy include:
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