If your business gathers sensitive personal information from its employees and customers, then you should strongly consider Cyber Liability Insurance.
The following Ultimate Guide will explain what it is, why you need it, provide recommendations on which companies offer the best Cyber Liability Insurance policies so you can choose with confidence.
What is Cyber Liability Insurance?
Cyber insurance generally covers your business' liability when a data breach involving sensitive customer information, like SSNs, credit card accounts, driver's licenses, or health records occurs.
Who Needs Cyber Liability Insurance?
If your company gathers and maintains employees' personal identifying information (PII) such as their SSN, address, date of birth, etc., or the credit card information of customers, this insurance is geared towards you.
What Does Cyber Liability Insurance Cover?
Cyber Liability Insurance can protect your business against financial loss in these scenarios:
- Extortion from professional hackers holding your data hostage.
- A data breach or hack resulting private customer or employee information exposure.
- Loss of physical records, such as a lost or stolen company laptop containing sensitive information.
- A network failure resulting in files being exposed.
- Claims of copyright infringement, libel, IP infringement, or slander*.
*Check with your policy for this type of coverage.
What Doesn't Cyber Liability Insurance Cover?
While Cyber Liability Insurance protects your business from multiple cyber attacks, it does have its limitations. Cyber insurance does not cover any of the costs associated with increasing your system's security measures or risk mitigation contingency plans.
It also does not cover the cost of damages as a result of harm to your business's reputation, or any claims that include an omission or error (see Errors and Omissions insurance).
When Would You Need Cyber Liability Insurance?
Your company's data systems were hacked, and the credit card information of 100K+ customers was compromised. Some of these thousands of customers sued your business because their cards were used to make fraudulent charges, disrupting their financial stability, and jeopardizing their identities.
Your business is now staring at a very expensive lawsuit, even though you did nothing wrong.
This is a situation where Cyber Liability Insurance is your best ally. It can be used to cover the costs of lawsuits and legal fees, the cost of notifying your customers that their information was compromised—making them whole again, and, covers the investigation into the data hack.
How Much Does Cyber Liability Insurance Cost?
Data breaches are expensive. While cybercrime continues to impact businesses, whether they deal in data or not, insurance companies are increasingly adding this to their list of liability insurance products. Like any other insurance policy, premiums vary based on a number of factors.
Where Can You Get Cyber Liability Insurance?
Cyber liability is available from numerous insurance providers — brick and mortar as well as online. Cover Wallet, Vouch, and Embroker are companies that carry Cyber insurance.
Learn more about 12 other types of insurance, take a look at our Ultimate Guide to Selecting Business Insurance.
Disclaimer: Skip does not endorse, nor is affiliated with any of the companies mentioned in this article. They are referenced here for informational purposes only. Always conduct your own research before purchasing any insurance policy.
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