What Is Cyber Liability Coverage?
Cyber liability insurance covers financial losses that result from data breaches and other cyber events. Unfortunately, data breaches and cyber crimes are happening way too frequently. Data breaches can result in major fines and legal fees. Data breach can damage more than your computer information, but also your reputation. These are some of the reasons why cyber insurance can be a smart way to protect your business.
Many policies include both first-party and third-party coverages. First-party coverages apply to losses sustained by your company directly. An example is a damage to your company’s electronic data files caused by a hacker. Third-party coverages apply to claims against your firm by people who have been injured as a result of your actions or failure to act. For instance, a client sues you for negligence after his personal data is stolen from your computer system and released online.
What Does a Cyber Liability Policy Cover?
Like many businesses, your firm may use, store, send, or receive electronic data. This data may include information that belongs to your business, like sales projections and tax records. It may also include data that belongs to other people, such as customers, employees, and vendors. Examples of other people’s data are customer payment records and employees’ social security numbers.
If electronic data stored on your firm’s computer system is lost, stolen, or compromised, the cost of restoring it can be significant. Moreover, your company may be liable for damages to third parties whose data has been stolen. Your firm may also incur notification expenses if your state requires you to inform those affected by a data breach. You can protect your business against the costs associated with data breaches by purchasing a cyber liability policy.
While cyber liability policies vary from one the next, many provide similar types of coverages. The most common coverages are outlined below.
First Party Coverages
Cyber liability policies typically include various property and crime coverages. They also cover certain costs, such as notification expenses. First-party coverages are often subject to a deductible.
- Loss or Damage to Electronic Data
- Loss of Income or Extra Expenses
- Cyber Extortion Losses
- Notification Costs
- Damage to Your Reputation
- Third-Party Liability Coverages
Most cyber policies include more than one type of liability coverage. These coverages apply to damages or settlements that result from covered claims. They also cover the cost of defending you against such claims. Note that defense costs may reduce the limit of insurance. Virtually all cyber liability policies are claims-made. Some third-party coverages may be subject to retention.
- Network Security Liability
- Network Privacy Liability
- Electronic Media Liability
- Errors and Omissions Liability
- Other Coverages
Other coverages that may be available under a cyber liability policy include various crime coverages such as computer fraud, funds transfer fraud, and cyber terrorism (acts of violence committed for political purposes).
Consider all the different scenarios where your stored data could be compromised. Imagine the devastating consequences of not having a policy in place to deal with those risks. Reach out today and let The Dunn Group help you protect the personal information you hold on your clients and employees with a Cyber Liability Policy.
to get a free commercial or business insurance quote
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Consider it DUNN!