What Exactly Does a Cyber Liability Insurance Policy Cover?

June 19, 2020 Blog

Helpful Advice from the Business Insurance Center Team

Almost all businesses utilize computers and smartphones to send, receive, and store electronic data. This information can include sales quotes, tax records, your customer’s private information, vendor’s information, and employee records. If any of this information is lost or stolen by a hacker, you may struggle to replace it. Customers and employees can also sue because of the data breach.  Your reputation can be tarnished, and you may never win the trust of your clients again.

Bolster your company with steps like additional training for spotting phishing emails, two-step authentication logins, and updating security software. Then talk to an experienced broker at the Business Insurance Center about a cyber liability insurance policy. This vital piece of security can help you recover in the event of a breach.

What Is Cyber Liability Insurance?

Today’s cyber world is dangerous. Hackers are not afraid to take advantage of any weaknesses in your infrastructure. You need something to help you recover when these attacks occur. A cyber liability insurance policy helps cover financial losses because of a breach. Here are a few more bits of information to keep in mind:

Two categories of coverage: Depending on the source of the claim, your policy may be first-party or third-party coverage.

  • First-party – For those expenses, you incur as a direct result of the breach, first-party coverage will kick in. Generally, these include the costs you pay to inform your customers. There are a variety of policy types:
    • Loss or damage to electronic data – It can get expensive to restore data or programs. These losses may be from hackers or a virus, for example.
    • Loss of income – You may suffer from the additional expenses of trying to keep the doors open until you get back up and running.
    • Extortion – Yes, criminals will break into your computer network and threaten to damage your data if you don’t pay them money. You can get coverage for this.
    • Notifying customers – It costs money to inform all your clients of any cyber breach. Not everyone has those funds available, especially if you need to offer credit monitoring services.
    • Reputation repair – There are costs of marketing and public relations to save your reputation. You can get some help with it.
  • Third-party – When you have claims filed against you, third-party coverage can help with those covered claims and the costs of your defense:
    • Network security and privacy liability – You may be sued for neglect or errors and omissions that resulted in the attack. Your customers may claim you failed to properly protect the system.
    • Regulatory – If you are assessed and fined by a regulatory agency, this coverage may cover you.

Cover Your Electronic Data with Cyber Protection from the Business Insurance Center

Take proactive steps to protect your company and your customer’s data. Obtain a cyber liability insurance policy from the Business Insurance Center for those times when the attack still occurs. Our brokers help owners across many different industries get the coverage they need at reasonable rates. Contact us today and see the difference!

Request a quote online or call and speak with a knowledgeable and experienced broker at the Business Insurance Center. We have a 24/7 call center to serve you and an online Live Chat operator. 

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