Nowadays, there are myriad insurance policies that cover everything from your health, your car, your luscious locks, and even a business’s cyber liability. Cyber liability insurance is designed to cover consumers of IT services/products, specifically when said company experiences a data breach that leaks vital data such as customer information and credit card numbers. In layman's terms, if a hacker launches a cyber attack on your business, cyber liability insurance ensures that your company will be compensated for the damage.
Cyber liability insurance is often confused with technology errors and omissions (tech E&O) insurance. The main difference lies in the fact that tech E&O coverage focuses exclusively on the providers of technology service or products, as well as the protection of their tech products and software. This includes computer software and hardware manufacturers, website designers, and firms that store corporate data off-site.
Despite being around for a decade, many business owners and security professionals have either never heard about cyber liability insurance or are unaware of its existence altogether. With the absence of a cyber liability insurance policy, companies wouldn’t know when your data has been breached or if your data has already been breached. So how can businesses better manage risks related to data breaches and reduce the staggering costs that ensue? Investing in cyber liability insurance.
Currently, cyber liability insurance coverage can include the following:
- Data breach/privacy crisis management cover - all incident management expenses are taken care of; everything for investigating, remediating, subject notification, legal fees, even regulatory fees are covered.
- Multimedia/media liability cover - this covers any third-party damages such as specific website defacement and intellectual property right infringements.
- Extortion liability cover - damages stemming from extortion and professional fees related to dealing with extortions are covered.
- Network security liability - covering third-party damages resulting from access denial, costs linked to third-party suppliers as well as data theft on third-party systems.
Despite all the bases cyber liability insurance is able to cover, not many are sold on the idea just yet. Here are some additional reasons that might nudge you in that direction:
According to Ethan Miller, partner at a San Francisco law firm Hogan Lovells, “I’ve seen policies with premiums start as low $2,000 a year, though it can go up from there.” With it, you receive coverage as high as $30 million as well as deductibles as low as $10,000 - depending on your company’s needs and what your budget allows. Because of its novelty and varying policies, you’ll be given lots of room for negotiation.
It covers more than you think
Many policies offer first-party coverage, meaning they'll pay for business interruption, cost of breach notification and even expenses needed to hire a PR firm to rehabilitate your compromised reputation. By having the cash, you'll be able to sustain your business until normal cash flow can be regained. Adequate policies can even cover regulatory fines or penalties incurred from data breaches.
Miller believes "If a larger company has one line of business shut down by a data breach, it may be able to depend on its other lines for revenue. A smaller company may only have one line of business." This means that business interruption coverage can be especially beneficial for smaller businesses.
No risk management teams
Big corporations have entire departments responsible for analyzing the risks the company could face, and they can even come up with preventative policies you might not. That’s where a good insurance carrier comes in. Miller says that "An insurer might work with a small company to make sure a firewall is in place to protect your network, and make sure you have social media policies that reduce risk." By ensuring your protection, it reduces the chance of breach and an ensuing claim.
General policies fail to cover you
According to Miller, general liability policies specifically exclude losses sustained from the Internet, which is why a reliable cyber liability insurance policy is needed to pick up where general policies leave off. Always make sure that laptops and mobile devices are covered, allowing yourself coverage in as many situations as you can. Consult brokers and ask them to integrate the cyber liability with your current general liability policy. "You want to give yourself the most seamless coverage possible," Miller advises.
In a world abundant with tech mysteries and uncertainties, one can never be too safe. With the right cyber liability insurance policy, whatever might try to harm your business can only make you stumble but not fall. Second chances are a luxury that not many small- and medium-sized businesses can afford; in a matter of seconds, all the years of blood, sweat, and tears can be wiped away for good. Allow [company_long] to help you pair your business with a unique cyber liability insurance that addresses all your needs and requirements. For any questions, send us an email or give us a call today!