Cyber liability insurance is security insurance that covers the cost for a business to recover from cybersecurity mishaps like a data breach, viruses, and other cyberattacks. It also covers the hefty costs of legal claims that hit your business out of the blue. Any business that houses sensitive data in their cloud or on any electronic device in-house must have cyber liability insurance.
Without highly skilled tech teams and IT staff, small scale businesses are most likely to need reliable cyber liability insurance. In this blog post, you’ll learn more about the coverages, cost, and benefits of purchasing cybersecurity insurance.
Cybersecurity Insurance, an added layer of protection
Cyber liability insurance is also known as cybersecurity, confidential liability, and media liability insurance. It helps your company give an immediate response in any misfortunate events of data breach or hacking. If your network or computer systems are hit with a cyberattack or corrupted by a virus, for instance, cyber liability insurance acts as your rescue plan.
Often, general liability policies contain basic cybersecurity threat coverage. However, businesses that are more tech-savvy in terms of data and codes essentially need a proper cyber liability policy to ensure safety. Companies that store personally identifiable information (PII) for customers or employees are required to have stand-alone and robust cyber liability insurance. PII includes any data that can straight away identify a particular individual, such as date of birth, name, social security number, identification number, email address, credit card number, or bank account number.
What does Cyber Liability Insurance cover?
Cyber liability coverage widely vary based on your insurance company. Because insurers started offering cybersecurity coverage only a few decades back, there no defined standard of a cyber liability policy as of yet.
Despite the variation, there are two basic types of coverage:
First-Party Coverage
This coverage pays for urgent expenses that a company suffers after a cyber breach. This includes:
- Cost of notifying customers and employees
- Repairing any damaged hardware or software
- Protecting the business’s reputation with a marketing and PR response
- Business interruption costs
- Extortion money (in case of a hacker asking for ransom)
- Other ancillary costs, such as credit monitoring costs for customers
Third-Party Coverage
This coverage helps businesses defend against legal claims and lawsuits. This includes:
- Privacy lawsuits claiming that you violated the privacy of employees or customers
- Fines from regulatory and government bodies
- Media liability claims, such as copyright claims, libel, or slander.
- Breach of a contract or other negligence claims
The best thing about cyber liability insurance is that it is entirely customizable. You can get special coverages that you may need based on your business type. There are risk mitigation services available to help you identify and avoid potential cybersecurity threats and breaches. In case of any cyberattack, you can seek insurance coverage to set up a hotline that customers and the general public can call to get more information.
Have more personalized questions and queries? Reach out to us, and we will make sure you are well-informed about everything related to cybersecurity insurance before purchasing it.
