The Growing Importance of Cyber Liability Insurance
Posted by Lotfey Dennett Insurance Brokers on
In the 21st Century, technology is vital to conducting business. However, the same technology your business relies on can also leave it vulnerable to costly security threats. Cybercrime is big business and becoming increasingly more sophisticated with advances in technology.
No one is safe from cybercrime – neither individuals, nor small businesses, nor the largest corporations. Cyber liability insurance can help protect your business from major expenses, business losses, and regulatory fines and penalties should a data breach occur.
What Cyber Liability Insurance Covers
Cyber liability insurance is designed to cover losses related to hacking that other business policies will not cover. For example:
Client or customer names and contact information, employee information and social security numbers, and all your business data have the utmost value to your company, and to criminal hackers as well. Although standard business and property insurance will not cover this asset, cyber liability insurance will.
If your systems fail because of a computer virus, a data breach, or a destructive employee, business interruption insurance will not provide coverage. Cyber liability insurance can cover loss of profits when a system crash is caused by a virus or cyberattack.
Your company may be held liable for loss of third-party data. Under commercial contracts containing security warranties, non-disclosure agreements, or merchant service agreements, you could be dealing with expensive damages claims in the event of a data breach. Your company could be held responsible for the costs of fraud conducted on stolen credit cards, forensic investigations, and card re-issuance. Cyber liability insurance can provide protection from these losses.
Most states in the U.S. have enacted data breach notification laws. A reputable company protecting its brand will provide breach notification as required by law. When sensitive personal information is lost in a data breach, written notification must be sent to affected individuals. This time-consuming, expensive endeavor is covered by cyber liability insurance, along with any regulatory fines or penalties assessed against the company.
Your business website and employee activity can trigger liability on social media sites. Cyber liability insurance can cover liability for copyright infringement, defamatory statements, and leaked information. It may also cover the PR costs of repairing the damage done to your brand. When a data breach occurs, the loss of customers and company image can me more damaging than the costs incurred in repairing the breach.
Minimizing Cyber Risks for Your Business
A good insurance agent can help ensure that you have maximum protection against cyber threats. Our agent at Lotfey Dennett Insurance Brokers in Portland, Maine will help ensure that you have the correct customized policies place to protect your network, or purchase social media insurance to reduce risk. If your data is stored in the cloud, cyber liability insurance can provide protection.
Policy premiums for cyber liability insurance will depend on industry, services, types of sensitive data, risks and exposures, along with a number of other factors. Our agent can assist your with risk management and help ensure that your business has the cyber liability insurance coverage it needs.