As we’ve said goodbye to a large amount of physical forms of secure transactions, such as checks, paper records, and post, the digital world has slowly begun hosting many of our most important assets. With that, it has become far easier for criminals to attempt (and often succeed) at stealing these assets from anywhere around the globe. This alone is why cyber insurance has become a fundamental source of protection for any business operating in the digital age. Although cyber insurance is regularly spoken of, very few fully understand the coverage in detail. So what does cyber liability cover?
Cyber liability insurance coverages can be complex. The legal and technological aspects of privacy and data breaches are constantly evolving. However, it’s important to fully understand the potential financial impact and damage a data breach can have on not only large companies, but also mid-sized and small businesses. A security breach can cost a small business $500,000, plus much more.
As cyber risks continue to evolve and attacks become more and more frequent, it’s imperative to protect your organization with the right cyber liability coverage and fully understand what coverages are available under this policy.
What Does Cyber Liability Cover?
A cyber liability insurance policy offers a number of coverages to protect from both first- and third-party damages.
First-party coverage protects an organization from the costs they may face should their own assets be damaged and need repair.
Within a cyber policy, this may include:
- IT Forensic Costs: The costs to determine what information was breached and the cause of the breach.
- Notification Expenses: The costs to notify individuals, businesses, and regulators of the breach and possibly run a call center related to this notification.
- Credit Protection Costs: The costs to provide credit monitoring services to any affected parties.
- Crisis Management Costs: The costs for media relations, including a possible public relations firm. How your organization publicly responds to a breach is crucial in maintaining the public’s trust.
- Crime and Social Engineering: The cost of stolen funds in which your organization may have been tricked into sending to a fraudulent account.
Third-party coverage protects your organization from claims that could be made against you by another individual or business.
- Personally Identifiable Information (PII): This can include, but isn’t limited to:
- Credit card numbers
- Social security numbers
- Bank account information
- Personal health information
- Sensitive corporate information
- Third-party claims related to, but not limited to:
- Breach of contract
- Negligent protection of data
- Network security breaches
- Transmission of software viruses
- Denial of service attacks
- PCI fines, penalties, and assessments
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- Multi-Media Coverage: This covers the cost of possible online advertising, intellectual property, copyright or trademark infringement, and libel or defamation claims.
- Cyber Extortion: This covers the cost of a possible ransom demand in the event of a ransomware cyber attack.
- Cyber Business Interruption: This coverage is available for companies that rely heavily on the internet or their network for revenue. This may also include dependent business interruption, which can provide coverage when a third party that your organization relies on goes down or system failure where an outage is not caused by a breach.
- Hacker Damage or Digital Asset Damage: This covers the cost to rebuild your:
- Electronically-held data
Based on the coverages offered under a cyber liability policy, it’s clear that the risks associated with a data breach are serious. Data security is now asset security for organizations and a possible infiltration of your computer system or network could lead to devastating costs and mistrust in the public eye.
As the list of coverages provided under a cyber liability policy are extensive, you may be asking: What does cyber liability not cover? This can include:
The Need for a New Type of Insurance Policy
As most businesses now have a great reliance on digital assets rather than physical ones, cyber insurance has to adapt to handle these new, digital threats. It’s important to select an experienced carrier who can walk you through all the necessary details of selecting the right cyber liability policy for your organization. Your insurance company should help you understand your organization’s risks and provide expertise on how to determine your cyber liability limit.
Should a breach occur, you’ll be thankful for the exceptional access ProWriters offers on post-breach services. This can include a breach coach who is available as soon as a breach occurs, as well as access to all of the best vendors.
For more information, contact us or speak with a ProWriters expert today at (484) 321-2335.