Cyber Liability

What is Cyber Liability Insurance? 

Technology plays a big role in our everyday lives from storing customers personal & payment information to sending emails and even Facebook messages. We are constantly at risk for a virus, malware, or other cyber-attacks. Cyber Liability will provide coverage in the event you are liability for costs incurred by customers and other third parties as a result of a cyber-attack, data breach, or other IT related incident. The policy can also provide coverage for system recovery, notification expenses, regulatory fines, and class action lawsuits. 

How is coverage written? 

Similar to crime insurance, the coverage can be written on a first or third-party basis. Although most carriers provide coverage for both, there is a difference in what they cover and the response that is triggered.

First Party Cyber Liability – can include:

• Notification to clients informing them of the breach or hack  
• Credit monitoring services for affected customers
• Public relations expenses
• Business interruption coverage
• Cyber extortion / ransomware costs 

Third Party Cyber Liability – can include:

• Legal defense in the event of a lawsuit
• Settlements, damages, and judgments related to the breach 
• Liability to banks for re-issuing credit cards
• Cost of responding to regulatory inquiries
• Regulatory fines and penalties (including payment card industry fines)     

Who needs Cyber Liability Insurance?

If you keep or store customer or employee information, have a website, use a computer to manage finance or billing operations, market online, communicate with clients, etc., you are at risk. A traditional general liability or business owner’s policy will not cover cyber related claims. Cyber-attacks can target both small and large businesses and often target companies with the least amount of cyber protection in place, so don’t think your business is too small to need Cyber Liability.